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Recession drives growth in start-up firms

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Huge numbers of businesses have sprung in the aftermath of the recession, a new study has revealed.

The report, which was put together by consultancy, analysed data held at Companies House.

It found that over 200,000 new firms were set up in the six months following the official end of the recession in January this year.

The figure represents a 51 per cent increase in the number of start-ups when compared with the period before the economic downturn struck.

The first two quarters of 2010 saw the launch of 204,000 new businesses; the first six months of 2008 recorded 157,000 new enterprises.

Many new firms have proven themselves robust too. Only 0.6 per cent of companies that were founded in 2009 went into receivership or liquidation in the same year. This compares with an annual average of 4.5 per cent of firms established between 2000 and 2008.

Tony Heywood, chief executive of, commented: “The recession left many people out of work or unhappy in work and it is these people that are now using their own initiative to set up their business and help kick-start the economy again.

“The recession has created a new generation who are setting up companies based on leaner business models, enabling them to adapt to the new economy.”