The UK's poorest areas could drive UK growth

Some of the UK's poorest areas have the best potential for economic growth, according to research for the BBC.

The North East, Yorkshire and Humber, badly hit by the downturn, were found to have the highest proportion of fast-growing, export-focused firms.

The research by Experian also shows a sharp increase in the number of companies in the East of England.

England saw its business base grow, while Scotland's stagnated and Wales' and Northern Ireland's shrank.

The study looked at the number of businesses operating in all local authorities in the UK between 2010 and 2012, and found sharply differing fortunes across the country.

In about 70% of all local authorities across the UK, the absolute number of businesses did actually increase.

Max Firth, managing director of business information services at Experian, said "there are really really good pockets of entrepreneurial, potentially successful businesses across the UK, not just in the South East, they are spread across the UK... they are spread geographically and across all sectors".

But some areas suffered sharp losses. Knowsley in Merseyside saw more than 2,500 companies disappear - down from 6,610 firms to just 4,070 over the two-year period - which is equivalent to a fall of more than 21% per year.

Hounslow in London, Shepway in the South East and Warrington in the North West were England's other poor performers.

Belfast saw its business base drop 9.1%.

Overall, England's regions saw the most business growth, gaining 0.5% more companies.

Scotland's business base more-or-less stagnated, up just 0.1%, while in Wales the number of companies fell by 0.3%. Northern Ireland however was worst off, with the number of firms down on average by 3.3% during the period.

Quality of growth

However, the number of companies trading can provide only limited insight into economic prospects, and the Experian research, commissioned by BBC English Regions, also looked in closer detail at the quality of growth across England.

The analysts at Experian examined the size and growth prospects of companies, and whether they explored global markets.

Some of England's most economically challenged regions also have the highest concentration of what Experian calls "business champions", firms that have big economic potential, with the North East, Yorkshire and the Humber in the lead.

Middlesbrough, for example, is one of the top five areas teeming with these companies, alongside Forest Heath and St Edmundsbury in Suffolk, Norwich, and Chesterfield.

Correction: An earlier version of the story wrongly suggested that the business base in Wales grew 0.3%. In fact the number of companies fell by 0.3% during the period.

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