A new study of 526 UK small businesses has found that town and city centres are increasingly blighted by empty shops, with owners saying the UK is now a tougher place to trade than the rest of Europe. The report, published by small business network Enterprise Nation, blames rising wages, business rates, energy bills, National Insurance and VAT for stalling growth on the high street, a trend that risks further hollowing out British town centres and holding back job creation.

The Growth on Hold report found 22 per cent of shop owners say more than a quarter of nearby shopfronts are vacant, while 64 per cent believe Britain is harder to operate in than its European peers. Some 77 per cent of high street firms have delayed growth plans and 42 per cent have cut customer-facing staff, with two-thirds paying business rates compared with just a fifth of other small businesses. Case studies included Perky Blenders, a London coffee chain whose annual employer National Insurance bill has risen by over £20,000 since 2024, and Fitzrovia restaurant Broken Eggs, whose owner said rising costs have swallowed all the profit from its growth. VAT was cited as the top pressure by 29 per cent of firms, ahead of wages at 24 per cent, with cutting VAT now businesses' leading policy demand.