The UK’s heat wave is burning the economy as small businesses and growth lose
The third heat wave in the UK in four weeks has not only pushed temperatures toward Mediterranean levels, but also put pressure on an already fragile economy.
From Herefordshire farms to high street bakeries, businesses across the UK feel stressed because record heat can destroy productivity, cut sales and increase costs. For many smaller operators, the summer sun is no longer a seasonal boost – it is becoming an increasingly threat to survival.
Rob Davies reported half of his grass and corn yields on dairy and arable farms in Herefordshire. “For us, grass is a very important crop, and current grass yields are down by about 50%,” he said. “Cores also want to drop by 50%.
The impact goes far beyond the fields. Lower yields mean less packaged work for contractors, less revenue and increased pressure on fixed costs. “The impact of the economy as a whole can be very far-reaching,” Davis warned.
The broader economic impact is distinct. The hot dates lost £1.2 billion in productivity per year because the UK’s infrastructure and labor are not able to cope with extreme heat, according to the Office of National Statistics.
“Our homes are not designed for heat. Nor is our transportation infrastructure,” said Elizabeth Robinson of London School of Economics. “So it’s hard to work at work and it’s hard to play a role at work.”
This is echoed by Chris Spinks, who runs a Norfolk-based company that installs transportation systems. His workers are in the sun every day, dealing with metal equipment that can become dangerous. “It takes longer to get the job done because people are taking more breaks, cooling on the van, drinking water, and taking off the sunlight,” he explained.
Melting apron, curved rails and signal failures are becoming increasingly common. Underground temperatures in London are usually above 5°C, while the 40°C heat in July 2022 drops 25% in one month from the footsteps of the UK city centre.
High temperatures are stopping shoppers from getting off the high street. Visits to UK stores fell 1.8% last month, while overall traffic fell 3% in June compared to the previous year, according to the UK Retail Alliance.
The sunny mantra weakens sales with a household name. Greggs recently issued a profit warning, citing weak demand for baked goods in hot weather. Its stock price fell 15%. Footwear brand Dr. Martens also blames the warm temperature on disappointing sales.
But while large retailers can absorb seasonal volatility, it’s easier for small businesses.
Charlotte Giddings runs Brownie and The Bean, an online and wholesale bakery in Suffolk. “The last thing people want when it’s hot is chocolate and cake,” she said. The market and pop-ups are working to break, with turnover down 30%. “We have to cut down on employee hours wherever we can. It hasn’t been that bad for five years.”
On practical plants near the Norfolk-Siufak border, shop owner Phil Rusted said the heat wreaked havoc on his nursery. “Revolution fell 30%, and I lost about 10% of my stock. I worked seven days a week just to keep the plants alive and without profits.”
European suppliers are also struggling. After a long trip, the plants arrived poorly after the sultry van and hit the edge further. “We have laid off two employees and may need to fire another employee,” he added.
These are not isolated complaints. The Metropolitan Office recently reported that the probability of reaching 40°C in the UK has almost tripled since 2000, with a 50/50 chance of reaching that level again in the next 12 years.
James Porter, a senior lecturer at King’s College London, warned that the £1.2 billion annual fee for hot weather underestimates what is happening now. “The last five years have been the hottest on record. The heat wave has caused huge losses.”
Even the central bank is paying attention. Frank Elderson of the European Central Bank recently warned that heat waves could mean lower growth and higher inflation. In 2022, food inflation rose by nearly a percentage point due to calories.
For many small companies, the prospects are very serious. The UK’s economic base (from transportation and retail to agriculture and manufacturing) was not built for extreme heat. However, this heat is now waving.
Davis, a farmer in Herefordshire, concluded: “When it rains, it seems to forget how to stop. When it stops, it forgets how to start.”
The UK economy began to feel the same way – between extremes, there was no system of adaptation. Unless policymakers take urgent measures to help businesses with the environment climate, calories may continue to burn as growth occurs.
