This week's heatwave across Western Europe broke temperature records in the UK and France and is straining health systems and power grids. Concurrent heat and drought are spreading into the real economy, damaging crops and disrupting supply chains while increasingly reducing household incomes. A study in Global Environmental Change found that over roughly the past 20 years such extreme weather lowered European household annual income by nearly 3% versus a no-event counterfactual and put about 5.

This week's heatwave across Western Europe broke temperature records in the UK and France and is straining health systems and power grids. Concurrent heat and drought are spreading into the real economy, damaging crops and disrupting supply chains while increasingly reducing household incomes. A study in Global Environmental Change found that over roughly the past 20 years such extreme weather lowered European household annual income by nearly 3% versus a no-event counterfactual and put about 5.6 million people at risk of falling into poverty. Income hits are larger where hot, dry conditions are more frequent because high temperatures cut labor productivity and raise heatstroke and cardiovascular illness. The study warns that, without strong climate action, Europe could face double-digit income losses in the future.