UK Economy on the Move - Startups, EVs, and Record Car Sales Drive Growth

6th January 2026

Dspite often gloomy headlines the UK economy was accelerating in 2025, and the engines of growth are clear. Entrepreneurial energy, booming car sales, and the rapid rise of electric vehicles show far from stagnating, Britain's business landscape is thriving, innovation is surging, and consumers are responding — all signalling a strong boost to GDP.

Startups Outpacing Closures

Across the UK, new business formations continue to outstrip closures. Around 317,000 new businesses registered in 2024-25, while annual closures remain lower, resulting in a net increase in active companies — now over 5.6 million, a record high. This surge is more than a statistic: it reflects job creation, innovation, and investment potential across the economy. Even short-term spikes in dissolutions are outweighed by long-term growth, showing a resilient entrepreneurial culture.

Record-Breaking Car Sales

The UK car market also hit a milestone in 2025, with new registrations surpassing 2 million for the first time since the pandemic. Compact SUVs like the Ford Puma, family favourites such as the Kia Sportage and Nissan Qashqai, and popular hatchbacks like the Vauxhall Corsa dominated the charts. Even Tesla's Model Y emerged as the UK’s top-selling electric vehicle. This boom reflects robust consumer demand and confidence, even amid wider economic pressures.

Government and Manufacturer Incentives Power EV Growth

Much of the car market surge, particularly in EVs, is driven by strategic subsidies. The government offered up to £3,750 off eligible electric cars, while manufacturers added substantial discounts and financing deals, effectively cutting the price of many EVs by up to £11,000. These combined incentives made EVs more affordable and accessible, accelerating adoption and supporting environmental targets.

Why This Matters for UK Growth

Together, these trends are fuelling economic expansion:

Startups create jobs and drive innovation, strengthening productivity and investment potential.

Booming car sales, including EVs, stimulate manufacturing, supply chains, and retail activity, adding to GDP.

Subsidies and incentives accelerate the transition to cleaner technology, positioning the UK as a leader in sustainable transport.

In short, Britain is not just surviving economic pressures — it is thriving. The entrepreneurial boom, record car sales, and EV growth signal a dynamic, forward-looking economy. By combining innovation, consumer demand, and policy support, 2025 is shaping up as a year that proves the UK can grow, adapt, and lead in the global economy.