UK heatwaves may have cost economy £4.4bn in lost output so far this year, analysis finds
Repeated summer heatwaves are likely to have cost the UK economy more than £4bn in lost output so far this year, according to analysis by green thinktank Verdant. The findings highlight the growing economic toll of climate change, with the group's director, James Meadway, calling for urgent government action to protect workers and businesses from extreme heat, warning that costs will worsen in future years.
Verdant's estimate has risen from £2.36bn after June's heatwave to £4.4bn once July's high temperatures are included, with the thinktank warning annual costs could exceed £25bn by 2030 if heatwaves keep intensifying at the current rate. It is calling for a maximum working temperature, compensation for workers who lose hours to heat, and investment in cooler urban green spaces, with London and the south-east likely worst affected. The estimates, based on Allianz research showing productivity drops 3% per degree above 30C, broadly match separate LSE Grantham Research Institute findings of over £1bn lost during June alone, when a survey found 87% of people reported health impacts from the heat. The analysis comes as England faces an amber extreme heat warning, with almost three-quarters of the country now in drought.
- Heatwaves may have cost UK economy £4.4bn in output so far this year
- Thinktank Verdant warns annual costs could top £25bn by 2030
- Calls for maximum working temperature and worker compensation during heat
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The evidence demonstrates that heatwaves are causing measurable economic losses—already £4.4bn this year—with projections suggesting costs could exceed £25bn annually by 2030 if warming continues. Supporters argue these findings justify urgent government action, including workplace protections and investment in cooling infrastructure, contending that the escalating costs of inaction far outweigh the expense of preventative policy measures.
The case against
Whilst heatwaves do cause real disruptions, critics argue these estimates may overstate permanent economic damage, as businesses and workers naturally adapt through adjusted schedules, flexible arrangements, and technological improvements. They contend that prescriptive policies like maximum working temperatures could themselves damage economic flexibility and competitiveness, and that market-driven adaptation has historically proven more effective than regulatory mandates.