Successive heatwaves between May and July cost the UK economy at least £4.4bn, according to think tank Verdant.

It’s report The Price of Heat says that the cost of June’s heatwave alone was £2.36bn.

Businesses and policy makers are advised that action is needed to mitigate the impact of escalating temperatures on businesses.

A key heatwave cost is reduced productivity, say researchers. Another is the price of replacing failing or overheated equipment.

Investment in cooling programmes, green urban design and a national maximum working temperature are among measures needed due to increasing temperatures, says the think tank.

Extreme Weather Levy

A national heat insurance scheme is also needed, to protect incomes of those unable to work due to heatwaves. This could potentially be financed by an Extreme Weather Levy on fossil fuel companies, says the think tank.

It warned: “For each one degree Celsius temperature increase above 30 degrees in Europe, a 3% reduction in average output per hour has been observed.

“In a prolonged heatwave, these impacts add up to become significant economic losses. This is only the direct economic cost from productivity losses, and excludes things like losses from wildfires, or higher costs of energy for businesses and households.

If heatwaves continue to intensify the cost to the UK economy could be £25.6bn in total by 2030, says Verdant.

“Even this is likely to understate the true cost, since it captures only the direct hit to productivity,” it warns.

“Knock-on effects on electricity costs and supply, along with broader macroeconomic ripple effects, would push the figure higher still. Nor does it include the terrible toll in health and lives lost.”

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