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Repeated heatwaves are likely to have cost the UK economy more than £4bn in lost output by the end of July, according to new analysis by the thinktank Verdant, which warns the annual cost could exceed £25bn by 2030.
Verdant had estimated the economic cost of June’s hot weather at £2.36bn. Updating its assessment to include last month’s high temperatures, it now puts the hit to output at £4.4bn.
The thinktank says the direct costs arise because workers across many industries become less productive in heatwaves, while infrastructure and equipment overheats and has to be shut down. The largest effect is likely to have been felt in London and the south-east, where temperatures have been highest, it argues.
James Meadway, Verdant’s director, 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.”
The analysis comes as the Met Office issued an amber warning for extreme heat in England this week, following three previous heatwaves in May, June and July. The forecaster has said the UK is on course to record its hottest summer ever, with repeated heatwaves already weighing on trade and output this summer.
Verdant is calling on the government to introduce a maximum working temperature and to be ready to compensate workers who are forced to cut their hours because of extreme heat. Its report also points to the need for investment in urban redesign to create more cool green spaces in towns and cities.
The thinktank’s estimates draw on cross-European research by the insurer Allianz, which suggests workers’ hourly output falls by 3 per cent for every degree that temperatures rise above 30C. The figures exclude indirect losses such as the cost of fighting wildfires and additional electricity used to run fans and air conditioning.
If heatwaves continue to intensify at the same rate as over the last decade, Verdant suggests, the annual cost to the economy could rise to more than £25bn by 2030.
The estimates correspond with research by the Grantham Research Institute at the London School of Economics, which put the loss of output from June’s heatwave alone at more than £1bn, as workers cut back their hours or were less productive because of the heat.
In a survey of almost 2,000 people, the institute’s researchers found that 3.6 per cent of respondents did not work at all during the week of 22 June because of the temperatures, while 87 per cent reported at least one health-related impact, from disrupted sleep to dizziness.
Paul Nowak, general secretary of the TUC, which has previously called for a maximum workplace temperature, 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.”
Almost three-quarters of England has been declared officially in drought after the repeated heatwaves, which have also affected much of Europe. Economists have warned of the mounting costs of extreme weather, including the risk of higher inflation as droughts hit food production and prices.
The London mayor, Sadiq Khan, recently pointed to this year’s extreme temperatures as evidence that Labour should stick to its climate targets. “The climate emergency is here, and no one can say they didn’t see it coming,” he wrote.
