The research, compiled by personal finance experts at independent price comparison site NerdWallet, follows a record growth in startups.

There were more new businesses created between April and June than in any other second quarter on record.

It comes as workers increasingly leave London for other UK cities thanks to the rise in remote working. Major employers, such as the BBC, Channel 4 and the UK Civil Service, have also recently committed to moving key operations to cities outside the UK capital.

Scoring the UK’s largest cities (outside London) on how friendly they are for start ups, NerdWallet’s researchers analysed the latest data from government and business sources, including from the Office for National Statistics.

Edinburgh came in second place in the study, closely tailing Leeds which came in first, and beating Birmingham, Glasgow and Manchester which came in third, fourth and fifth respectively.

Edinburgh has climbed four places in the rankings since the report was last completed in 2019. Edinburgh also had the third highest number of people with an NVQ Level 4 qualification or above, the sixth highest business survival rate and the fifth largest active business population.

The researchers for the study looked at key datasets on each city’s business survival rates, the size of its active business population, average rental costs in each city, population sizes, average monthly pay in each area and the levels of education among the local workforce.

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Highlighting the economic potential of cities outside of the UK capital, the new research also follows the recent Westminster Cabinet reshuffle and renewed UK government messaging on ‘levelling up’ to spread prosperity across the country.

Nic Redfern, Finance Director at NerdWallet, comments: “It is fantastic to see so many in Britain starting their own business despite the challenges posed by supply chains and Covid-19.

“As we build back from the pandemic it is essential that we do more to support new start ups in key UK cities such as Edinburgh to help unlock more of their economic potential.

“Edinburgh is a leading financial centre and has thriving digital, science and tech industries, which have developed partly thanks to the internationally renowned University of Edinburgh and initiatives such as the Edinburgh BioQuarter.”