Britain’s third heatwave in four weeks is not just pushing temperatures to Mediterranean levels—it’s also turning up the pressure on an already fragile economy.
From Herefordshire farms to high street bakeries, businesses across the UK are feeling the strain as record heat disrupts productivity, slashes sales, and increases costs. For many smaller operators, the summer sun is no longer a seasonal boost—it’s becoming a growing threat to survival.
On his dairy and arable farm in Herefordshire, Rob Davies reports his grass and maize yields have halved. “Grass is a very important crop for us, and our grass yields currently are down by about 50%,” he says. “Maize is also looking to be around 50% down.”
The impact extends well beyond the fields. Lower yields mean fewer baling jobs for contractors, reduced revenue, and mounting pressure on fixed costs. “The impact across the wider economy could be quite profound,” Davies warns.
The wider economic effects are stark. Figures from the Office for National Statistics suggest hot days cost the UK economy £1.2 billion a year in lost productivity—mainly because Britain’s infrastructure and workforce are not equipped to cope with extreme heat.
“Our homes are not designed for heat. Our transport infrastructure isn’t either,” says Professor Elizabeth Robinson from the London School of Economics. “So it’s harder to get to work, and it’s harder to function when you’re at work.”
That’s echoed by Chris Spinks, who runs Westcotec, a Norfolk-based firm installing traffic systems. His workers are out in the sun daily, handling metal equipment that can become dangerously hot. “It takes longer to complete jobs because people are taking more breaks—cooling down in the van, drinking water, getting out of the sun,” he explains.
Melted tarmac, bent rail tracks, and signal failures are becoming increasingly common. London Underground temperatures regularly exceed street level by 5°C, while July 2022’s 40°C heat saw footfall in UK city centres fall by 25% in just one month.
High temperatures are deterring shoppers from the high street. According to the British Retail Consortium, visits to UK shops fell 1.8% last month, while overall footfall dropped 3% in June compared to the previous year.
The sunny spell has dented sales at household names. Greggs recently issued a profit warning, citing weaker demand for baked goods during hot weather. Its share price dropped 15%. Footwear brand Dr Martens similarly blamed warm temperatures for disappointing sales.
But while large retailers can absorb seasonal swings, small businesses are far more exposed.
Charlotte Giddings runs Brownie and the Bean, an online and wholesale bakery in Suffolk. “When it’s this hot, the last thing people want is chocolate and cake,” she says. Markets and pop-ups are struggling to break even, and turnover is down 30%. “We’re having to cut staff hours wherever we can. It hasn’t been this bad for five years.”
At Practical Plants, near the Norfolk-Suffolk border, owner Phil Rusted says the heat is wreaking havoc on his nursery. “Turnover is down 30% and I’ve lost about 10% of my stock. I’m working seven days a week for no profit just to keep the plants alive,” he says.
European suppliers are also struggling. Plants arrive in poor condition after long trips in sweltering lorries, hitting margins even further. “We’ve laid off two staff already and may need to lay off another,” he adds.
These aren’t isolated complaints. The Met Office recently reported that the likelihood of the UK reaching 40°C has nearly tripled since 2000, with a 50/50 chance of hitting that level again within the next 12 years.
James Porter, senior lecturer at King’s College London, warns that the £1.2bn annual cost of hot weather underestimates what’s happening now. “The last five years have been the hottest on record. There are significant losses attached to heatwaves.”
Even central banks are taking note. Frank Elderson of the European Central Bank recently warned that heatwaves may mean lower growth and higher inflation. In 2022, food-price inflation jumped by nearly a full percentage point in parts of Europe due to the heat.
For many small firms, the outlook is grim. Britain’s economic foundations—from transport and retail to farming and manufacturing—were not built for extreme heat. Yet that heat is now coming in waves.
Davies, the farmer in Herefordshire, sums it up: “When it starts to rain, it seems to forget how to stop. And when it stops, it forgets how to start.”
Britain’s economy is starting to feel the same way—caught between extremes, without the systems in place to adapt. Unless policymakers take urgent steps to help businesses weather the climate, the heat may continue to burn through growth.
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Heatwaves take toll on UK economy as small businesses feel the burn
