Mendip experienced a significant downturn in 2022, with hundreds of businesses closing their doors, mirroring a national trend where more companies ceased operations than were established.

This marks a concerning shift in the UK's economic landscape, with the highest number of closures since records began in 2002.

Around 545 businesses in Mendip shut down last year, a rise from 450 in the previous year, as per the Office for National Statistics. This increase has led to a 'business death rate' of 9.7% among the 5,645 businesses active in the area, surpassing the 'business birth rate' of 8.9%, with approximately 505 new establishments.

Dr George Dibb, head of the IPPR's Centre for Economic Justice, highlighted the significance of these closures. "Today's new data is a potential warning sign for the British economy with more companies going out of business than started up for the first time in 2022 since the tail end of the financial crisis," he remarked. Factors such as escalating energy costs and the end of coronavirus pandemic support schemes have been contributing to the rise in company closures.

In response, Chancellor Jeremy Hunt announced in his autumn statement a series of tax cuts aimed at supporting businesses. This includes a permanent tax break for firms investing in new equipment, which he claimed was the "biggest business tax cut in modern history".

Despite these initiatives, the rising number of business closures is a matter of concern. The IPPR's analysis points to a disparity in regional business development, with Dr Dibb stating, "If we want to reduce regional economic inequality and 'level up', we need to see more of these booming companies in every part of the country." He emphasised the need for fostering growth in all regions to address economic inequalities.

The transport and storage sector experienced the most severe impact, with a death rate of 23.8%, nearly double that of any other industry. Other sectors like information and communication, accommodation and food services, and retail also faced high closure rates.