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The number of start-up businesses has declined in the first quarter compared to last year, reflecting uncertainties over economic prospects.

According to research from Barclays, there were 98,000 new start-up businesses in England and Wales in the first quarter of 2008, down from 114,000 in 2007.

However, business closures have also fallen compared to previous quarters, the bank said, with 99,900 closures in the first quarter compared to 136,000 last year.

The most popular industries for start-ups were business and financial services (27,500 start-ups), construction (15,100) and the retail sector (10,700).

John Davis, marketing director for local business at Barclays, said: "Small business entrepreneurs are finding opportunities in the market place. They are entering in reduced numbers, reflecting an uncertainty over short-term economic prospects, but clearly there's a feeling there is never a bad time to start a good business.

"We do anticipate further modest reductions in both start-ups and closures during the remainder of the year, set against the high numbers in recent years."

Barclays also published figures on the contribution of non-UK nationals to small businesses.

According to the data, ten per cent of mainstream businesses – defined as having a business current account - and 15 per cent of start-ups in 2007 involved an owner-manager from outside of the UK.

"Unsurprisingly, the greatest contribution of these individuals to the business market is in London, where last year they were involved in nearly 30 per cent of SMEs and more than 35 per cent of start-ups," said Mr Davis.

"They also play an important role in the business life of a number of urban areas outside of the capital."