Why hotter summers are bad for the UK economy

When we think about the impact of climate change on the economy, images of droughts in Africa or hurricanes in the Caribbean might come to mind. But even in advanced economies such as the UK, hotter summers are being shown to carry a heavy price.

The past few summers in the UK have been among the hottest on record. In summer 2025, average temperatures across much of the country were more than 1.5°C higher than the usual seasonal average, with parts of southern England around 2°C hotter than normal. What does that mean for the economy?

The heat invites people outdoors. Beaches are packed, pub gardens overflow and families fire up the barbecue. Trade association the British Retail Consortium reported that retail sales increased by 3.1% in June compared to the same month in 2024. This was driven by a surge in sales of food, drink, and leisure products. From ice cream trips to garden makeovers and days out, sunshine typically encourages feel-good, spur-of-the-moment spending.

But warmer summers have downsides. High temperatures have a big effect on health, putting people at risk of heat stress, heat stroke and even death. Accommodation in the UK is designed to retain heat, which means that currently, 32% of homes in London and 17% of homes outside London are overheated. And the percentages of homes at risk of future overheating jump to 55% in London, and 33% in the rest of the country.

Heat also affects people while they’re at work. For those who work outside, the weather can have a serious impact on their health and well-being if it is not properly managed. And for indoor workers, a similar phenomenon occurs as workplaces in the UK—just like homes—are designed to retain heat.

The UK’s hotter summers have become such an issue that some unions are campaigning for a maximum temperature set by law of 30°C for non-strenuous indoor work. Currently, there is only guidance for a minimum temperature (16°C or 13°C if employees are doing physical work).

And the problems for workers can start even before they make it to work: overheated rails mean slower trains or even cancellations.

Counting the cost

Some industries are hit harder by the weather, not just through its effect on workers, but due to the heat itself. The hot summer of 2025 has made it difficult for farmers, who have seen cereal harvests shrink, grazing land dry up and animals suffer. In some areas, up to half of cereal and potato crops have been lost, with harvests arriving two to three weeks earlier than usual.

So, are hotter summers good or bad for the UK economy? Our study examined more than two decades of local economic data across the UK and matched it with seasonal temperature records. We found that a 1°C increase in summer temperatures reduces UK economic growth by about 2.4%.

Effect of 1°C rise in seasonal temperature on UK economic growth (%)

In practical terms, that means that even a modest rise in average summer heat can shave billions of pounds off the economy. But why does this happen?

Hot summers disrupt work and production. Businesses may see more staff off sick due to heat stress and related illnesses. Productivity in offices, factories and farms often drops as workers struggle in higher temperatures.

Our study shows that the agricultural sector is especially vulnerable. Hot, dry summers damage crops and livestock, and since much of the UK’s general cropping and dairy farming is concentrated in the south of the country, this area bears the brunt of economic losses.

Our findings also reveal that the impact of hot summers is not evenly spread across the country. Wealthier councils (those with an annual GDP higher than the national average income) are actually more vulnerable. The south of England, comprising the south-east (including London), the south-west, and the east of England, experiences the sharpest economic declines.

This is partly because the south is both hotter on average and home to many of the country’s farms. London alone, which generates more than half of the UK’s financial services output, emerges as a key “hotspot” of vulnerability.

We also found evidence that patterns of energy use matter. During hot summers, electricity consumption drops compared to during other seasons. While this might sound like a good thing, it signals reduced industrial activity, offices closing or shifts in working patterns that dampen economic growth.

The message from our research is clear—hot summers are not just uncomfortable, they are economically costly. Unless adaptation measures—better cooling infrastructure, workplace protections and support for climate-resilient farming—are introduced, the UK risks losing billions as heat waves become more frequent.

Climate change cannot be dismissed as a distant challenge. Our research shows its economic fingerprints are already visible in Britain’s summer heat. Preparing for hotter summers is not just an environmental issue, it is an urgent economic priority.

This article is republished from The Conversation under a Creative Commons license. Read the original article.