New figures show that the UK is experiencing ever increasing levels of entrepreneurial activity.

Research, carried out by Barclays, shows that 288,000 new firms have been started up in the first half of 2004.

The figure is almost a 25 per cent rise from the number of start-ups that appeared during the same period in 2003.

Recent increases follow news from the Small Business Service that the number of SME’s reached 4 million in 2003, with Enterprise Minister Nigel Griffiths celebrating UK small businesses as the “engine room of the UK economy”.

With small businesses accounting for 99.8 per cent of the business population, recent increases will please government ministers who had feared higher National Insurance contributions as well as increasing red tape would lead to a slow down in the sector.

Richard Roberts, Head of Small Business Research at Barclays, said, “The record levels we have seen so far this year reflect the large rises in people becoming self employed to boost their income or achieve a change in lifestyle.

“The ability to do this has been assisted by the strength of the economy which has provided opportunities for individuals to set up their business.”

On a regional basis, London fly’s the entrepreneurial flag with local authorities in the Capital occupying the first eight places.

The greatest increases of business start-ups were found in the leisure and professional services with a combined increase of 37,000 new businesses between 2003 and 2004.

Hotels and catering witnessed the fastest increases between the two periods, more than 70 per cent, which many put down to sustained growth over the past two years.

However, many people, though pleased with increases in the small business sector, are still cautious about the future of sustainable growth due to the effects of ever increasing taxation.

Richard Wilson, Head of Business Policy at the Institute of Directors, said, “It’s a good time to go into business because the overall economic situation is quite reasonable.

“However, although I am pleased that the number of SME’s is set to grow, I am worried at the prospect of higher National Insurance contributions for the self employed. The press reported that the Government might be considering the measure. Naturally, the IoD would oppose this.”