Start-up activity has dropped by nearly 4% up to the end of 2015, with the UK producing fewer businesses with ambitions of scaling up.
There has been an increase in the number of business exits with a 19% rise in the number of mergers and acquisitions (M&A) of companies less than five-years-old. There were a record number of deals from December 2015 to June 2016 (up 33%).
The jump was driven by the UK services sector, which accounted for 23% of all deals that took place, followed by financial services firms (10%).
However, there was also a steep drop in IPO activity (down 36%), which indicates a lack of confidence among companies to expand, as well as increasing market volatility.
Akshaya Bhargava, Chief Executive of Wealth, Entrepreneurs and Business Banking at Barclays, said: “This year’s Entrepreneurs Index shows that before the EU Referendum, regulations and conditions for entrepreneurs had improved, making it easier to start a business and contributed to a rise in M&A.
“Until the outcome is fully known, it’s vital that we do everything in our power to deliver a strong environment to sustain UK entrepreneurial growth.”