Repeated heatwaves across the UK this summer may have cost the economy more than £4bn in lost economic output by the end of July 2026, according to new analysis from the green think tank Verdant. The group's updated assessment, which factors in high temperatures recorded last month, puts the total hit at £4.4bn.
The figure builds on an earlier estimate covering June's unseasonably hot weather alone. Verdant's director, James Meadway, said the costs of a warming climate are no longer theoretical.
"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 losses stem from workers becoming less productive during hot spells, alongside infrastructure and machinery overheating and being forced offline. England is currently under an amber weather warning for extreme heat from the Met Office, the fourth spell of unusually hot conditions this year following heatwaves in May, June and July. The forecaster has said the UK's climate is trending toward more frequent and intense heat events.
What is driving the economic cost?
Verdant bases its figures on cross-European research from the insurer Allianz, which found that for every degree above 30C, hourly worker output falls by roughly 3%. The think tank says the south-east of England has likely borne the brunt of the losses, given it has recorded the highest temperatures.
These estimates do not include indirect costs such as firefighting expenses for wildfires or the additional electricity used to run fans and air conditioning during hot weather. According to a post from Meadway, UK air conditioning demand jumped 320% during the June heatwave alone, underlining the strain placed on energy systems even before productivity losses are counted.
How does this compare with other research?
Separate research from the London School of Economics and the CMCC, published on 23 July 2026, estimated that the June heatwave alone cost the UK economy £1.15bn in lost output and 24 million lost working hours. The same study found that 3.6% of survey respondents—equivalent to around 1.25 million workers—did not work at all during the week of 22 June because of the heat, while 87% reported at least one health-related impact, ranging from disrupted sleep to dizziness.
Verdant's own earlier press release had put the direct productivity cost of the June heatwave at at least £2.4bn, a figure later refined to £2.36bn in Meadway's subsequent briefing. Both the LSE-CMCC study and Verdant's figures point in the same direction even though the precise totals differ, reflecting the difficulty of measuring heat's economic toll with certainty.
Why does this matter for the wider economy?
Economists have grown increasingly concerned about the compounding financial risks of extreme weather, including the threat of higher food price inflation as droughts, floods and wildfires disrupt production. Almost three-quarters of England has now been declared officially in drought following the repeated heatwaves, a pattern echoed across much of Europe this summer.
Analysis from Oxford Economics has previously warned that sectors exposed to extreme heat—including construction, agriculture, manufacturing, retail and hospitality—make up 27% of UK economic activity, and that a four-day heatwave could cut quarterly labour productivity growth by 1.5 percentage points. That research followed the UK's own record-breaking heatwaves in May and June 2026, which our earlier coverage examined in detail, including reporting that unprecedented temperature records were broken across the continent and that the extreme heat may have contributed to more than 2,700 deaths in the UK. A separate poll found widespread sleep loss and health complaints during the June heatwave, with 86% of homes reported to be too hot.
What is Verdant calling for?
The think tank wants the government to introduce a legal maximum working temperature and to be prepared to compensate workers financially when extreme heat forces them to cut their hours. It is also urging investment in redesigning towns and cities to include more cooling green spaces.
If heatwaves continue intensifying at the pace seen over the past decade, Verdant projects the annual economic cost could exceed £25bn by 2030—a figure consistent with the think tank's earlier warning that losses could reach at least £25bn a year without government intervention.
What are unions and officials saying?
London Mayor Sadiq Khan has pointed to this year's extreme temperatures as evidence the capital must accelerate its climate adaptation efforts and hold firm to its climate targets, writing that the climate emergency is here and no one can claim they did not see it coming.
Paul Nowak, general secretary of the TUC, said workers are bearing the brunt of rising temperatures alongside the wider economy.
"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."
Key Facts
- Verdant estimates UK heatwaves have cost the economy £4.4bn in lost output so far this year.
- Separate LSE-CMCC research put the June heatwave's cost alone at £1.15bn and 24 million lost working hours.
- UK air conditioning demand rose 320% during the June 2026 heatwave, according to Verdant.
- Verdant projects annual losses could exceed £25bn by 2030 without government action.
- Almost three-quarters of England is officially in drought following repeated heatwaves.
