How the heatwave broke Britain

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Economists have used mobile phone and live bookings data to watch the economic carnage of the pandemic unfold in real time. But the figures also laid bare the hit caused by the heat to areas already struggling to adjust to a post-Covid world of homeworking.

Footfall on Britain’s high streets slumped 7pc across the UK on Monday compared to a week earlier, according to Springboard, while OpenTable data suggests there were far fewer people eating out at the start of the week. 

Google mobility data shows that public transport usage was down 30pc on pre-Covid trends on Monday, compared to minus 23pc the previous Monday. Footfall around retail and creation areas was down 13pc while activity in residential areas was up 10pc. 

In London, which is more reliant on the smooth running of trains and the Tube, public transport usage was 38pc lower than pre-Covid trends and activity in workplaces was 42pc down, much worse than a week earlier.

However, the bigger economic effect of hotter weather may be less tangible than shoppers on the high street and diners eating out.

Labour productivity – the efficiency of a worker, usually measured as output per hour worked – is also hurt by stifling heat, particularly in countries not set up for it. Forecasters believe it can cost the economy billions of pounds. 

Helia Costa, an economist who worked on the issue for the Grantham Research Institute on Climate Change, says: “When heat increases, workers’ ability to perform their jobs decreases. Their cognitive capacity decreases and physical capacity decreases so they feel less energy or loss of concentration, muscle cramps, exhaustion.

“These losses in productivity have negative impacts on the economy.”

Costa’s research suggests that a warm year in the latter part of this century would cost London’s economy €1.9bn (£1.6bn) based on 2005 prices, a hit equivalent to 0.4pc of output. Further south it will be even worse, with Bilbao in Northern Spain estimated to suffer a 9.5pc hit to output and Antwerp in Belgium facing a 2.1pc knock.

Hotter temperatures could reduce growth rates significantly. The Richmond Fed estimates that a one-degree Fahrenheit increase reduces output by 0.15 to 0.25 percentage points over the period of the temperature rise. 

James Pomeroy, HSBC economist, says the impact on productivity from limited working hours or businesses being unable to function could be “sizeable” in many countries.

He says the research suggests “the biggest drags would come from real estate, services and agriculture” and the average annual growth rate in the US being pulled down by 0.2 to 0.4 percentage points over the next 100 years.

More than 2pc of total working hours globally will be lost every year because staff will not work in the heat or go at a slower pace, according to the UN’s International Labour Organisation. In parts of Asia and Africa, 5pc of hours could be lost.

In Western and Northern Europe, the bulk of the lost hours are in the construction and agriculture industries, largely owing to the composition of these advanced economies.

On the Arabian peninsula, work is already banned for several hours in the middle day in the summer because of the extreme temperatures. But such bans for exposed workers could spread further.

The impact will be worse in cities, which are hotter than rural areas – an effect known as an urban heat island. 

The productivity hit could also be bigger for Britain’s army of homeworkers compared to those who are still in the office, given that few houses in Britain have air conditioning. 

Many of Britain’s buildings are designed to trap heat in a cooler climate. With one of the oldest housing stocks in Europe, Britain is neither served well by its buildings in summer or winter and unsuitable properties are still being developed. 

A report by the CCC, the Government’s official climate adviser, last year found that more than 570,000 homes have been built since 2016 that are not suitable for high temperatures, requiring “costly retrofit to make them safe, habitable and water efficient in the future”. 

It warned a further 1.5m will be built in the next five years, causing more costs further down the line. There is an irony that some modern innovations – for example, buildings constructed with windows that do not open, as a way of limiting heat loss – may be making the situation worse. 

‘Thankfully, most of us are not snowflakes’

Not everyone agrees we should lose our shirts over rising temperatures, however.

Sir John Hayes, chairman of the Common Sense Group of Tory MPs, last week complained that while many people clamour for hot weather throughout the year, the country shuts down whenever it arrives.

“This is not a brave new world but a cowardly new world where we live in a country where we are frightened of the heat,” he told the Telegraph. 

“It is not surprising that in snowflake Britain, the snowflakes are melting. Thankfully, most of us are not snowflakes.”

Dominic Raab, the deputy prime minister, encouraged Britons to “enjoy the sunshine”, providing they took “common-sense” precautions such as drinking water and applying sun cream. 

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