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East Midlands Chamber News

Start-ups fall as consumer spending slows

"Last year the economy was particularly strong and start-ups were at their peak," said a spokesman for Barclays. "However, the fall in consumer spending on the high street and uncertainty surrounding the housing market has dampened consumer confidence. As a result the number of start-ups has fallen."Despite the slight fall in start-ups - 116,300 this year compared with 129,500 for the same period in 2004 - Barclays believes it is not a cause for concern as the number of start-ups is 15 per cent higher than the usual average for this time of year. Barclays said it expects start-up figures to end the year at around 430,000, compared with 460,000 in 2004.However, accountancy firm BDO Stoy Hayward believes UK firms will face increasingly difficult economic conditions ahead. Its research found the number of business failures has increased three per cent in the first quarter of 2005, to an average of 315 per week."UK businesses are facing a difficult combination of circumstances as slower economic growth, higher interest rates and increased inflation raise the pressure," said BDO Stoy Hayward spokesman, Shay Bannon.But BDO Stoy Hayward believes it's not all doom and gloom. It s survey also found the number of business failures in the property and construction sector is set to fall three per cent in 2005 - to 2,273."A revival of demand for office space, and large public sector projects will help the construction industry to keep afloat," said Bannon. (c) Business Hotline Publications Ltd 2005

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