UK heatwaves may have cost economy £4.4bn in lost output so far this year, analysis finds

Repeated debilitating heatwaves this summer are likely to have cost the UK economy more than £4bn in lost economic output by the end of July, new analysis shows.

Green thinktank Verdant had suggested June’s unseasonally hot weather had an economic cost of £2.36bn. Updating its assessment to include last month’s high temperatures, it finds a £4.4bn hit to output.

As temperatures soar once again this week, Verdant’s director, James Meadway, said: “The economic costs of climate change are already with us, and set to worsen in future years. Action by the government to protect workers and businesses from the severe effects of extreme heat is well overdue.”

Direct economic costs arise because workers across many industries become less productive in heatwaves, while infrastructure and equipment overheats and has to be shut down.

This week’s amber weather warning for extreme heat in England from the Met Office, comes after three previous heatwaves in the UK in May, June and July. The forecaster has said the UK is on course to record its hottest summer ever.

Verdant is calling for the government to implement a maximum working temperature; and be ready to step in to compensate workers when they are forced to cut their hours because of extreme heat.

The report also points to the need for investment in urban redesign, to create more cooler green spaces in the UK’s towns and cities.

Verdant’s estimates exclude indirect losses such as the cost of fighting wildfires, and additional electricity consumption from running fans and air conditioning. The largest effect is likely to have been felt in London and the south-east, where temperatures have been highest, the thinktank argues.

If heatwaves continue to intensify at the same rate as in the last decade, it suggests the annual economic cost could rise to more than £25bn by 2030.

Verdant relies on cross-European estimates by the insurer Allianz, that suggest for every degree above 30C that temperatures rise, workers’ output an hour declines by 3%.

The estimates correspond with work by the Grantham Research Institute at London School of Economics, which suggested a £1bn-plus loss of output during June’s heatwave alone, from workers cutting back their hours or being less productive than usual, because of high temperatures.

In a survey of 2,000 people, the institute’s researchers found that 3.6% of respondents did not work at all during the week of 22 June due to searing temperatures; while 87% reported at least one health-related impact, from disrupted sleep to dizziness.

Economists have increasingly warned about the mounting economic costs of extreme weather events – including the risks of higher inflation due to rising food prices, as production is hit by droughts, floods and wildfires.

Almost three-quarters of England has been declared officially in drought after the repeated heatwaves, which have also affected much of Europe this summer.

The London mayor, Sadiq Khan, recently pointed to the impact of this year’s extreme temperatures as evidence that Labour should take on net zero sceptics and stick to its climate targets. “The climate emergency is here – and no one can say they didn’t see it coming,” he wrote.

Paul Nowak, general secretary of the TUC, said: “As climate change causes more heatwaves, workers are suffering – and productivity is taking a hit too. Many of us have experienced this directly as we’ve struggled to keep working through the heat.

“Unions are calling for rules that require employers to take action to reduce temperatures when they exceed 24C, and for work to stop when temperatures reach 30C, or 27C for strenuous jobs.”