Fewer start-ups venture into the market

Stock market turmoil also reduced the personal wealth many entrepreneurs rely on to start new businesses. The relative buoyancy of the property market and its positive effect on feelings of financial security is likely to have prevented the figure falling even further.

On the positive side, start-up numbers may surge in the third quarter as entrepreneurs, who deferred starting up in early summer, put their plans into action.

Mike Rogers, managing director for small business at Barclays said: 'From a low point last autumn we've been seeing improvements in the numbers of start-ups in successive quarters. The one-off factors of the extended bank holiday and football fever in June, combined with stock market volatility may have slowed this.'

Business closure numbers rose 8% on the previous year with 110,000 firms closing their doors in the second quarter of 2002 (Q2 2001, 102,000 businesses closed).