Thousands of businesses in Cumbria shut their doors for good in 2022, new figures show.

According to the Office for National Statistics, around 2,080 businesses in Cumbria ceased trading in 2022, down from 2,110 the year before. This is part of a larger trend of more UK businesses closing than starting up, surpassing the number of new start-ups founded for the first year since 2010.

The Institute for Public Policy Research (IPPR) has warned that the rising number of closing businesses is a ‘potential warning sign for the British economy’, blaming high energy costs and the end of Covid pandemic support schemes.

In response to this, Chancellor Jeremy Hunt announced a range of tax cuts aimed to aid businesses in his autumn statement.

This included making a tax break allowing firms to cut their bills if they invest in new equipment permanently, in what he claimed was the ‘biggest business tax cut in modern history’.

Some 19,320 businesses were active last year, meaning the 'business death rate' – the percentage of businesses that closed – has risen to 10.8 per cent.

This is above the 'business birth rate' – the percentage of businesses that began trading – of 9.2 per cent, with around 1,770 created last year.

Dr George Dibb, head of the IPPR’s centre for economic justice, said: “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.

“Whilst this isn’t unexpected – high energy costs combined with the end of pandemic support schemes would always see a rise in company closures – it might signify that greater business support would have maintained higher economic activity.”

Mr Hunt also announced the standard multiplier for rates on high-value properties will increase in line with inflation, while the small business multiplier will freeze for a further year.

The 75 per cent business rates discount for retail, hospitality and leisure will also continue.

Dr Dibb also highlighted regional inequalities in business development.

London and the Southeast are the only regions with an above-average number of businesses where the average annual growth in the number of employees surpasses 20 per cent over a three-year period.

He said: "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."

Transport and storage businesses particularly struggled, with the highest death rate at 23.8 per cent, almost double any other industry, which the Institute of Directors said was caused by ‘higher business costs and declining disposable income’.

Information and communication businesses had the second highest death rate at 13.6 per cent, while accommodation and food services, and retail industries had the joint-third highest at 12.8 per cent.