Is the heatwave affecting the global economy?

It's well known that countries with a temperate climate have an economic advantage.

It's easier to work in cool weather, and as a result productivity is higher. Crops too, do better in temperate summers that have a lot of rain.

This year the northern hemisphere has got a taste of tropical weather, and it looks like it is affecting the economy.

In the UK, retail sales were down (though food sales were up), as shoppers avoided the stores. British supermarkets have airconditioning, to keep the chilled areas chill, but most other stores (especially the smaller ones) do not and they lost trade as it was unbearable to be in them (it was warmer in store than outside). Going forward many will have to consider the expense of installing air conditioning, if future summers are going to be as warm. The old rainy cool summers may be a thing of the past.

Farmers across Europe and North America are reporting distress. Any crop that requires a lot of rain and only moderate sunshine, such as wheat and barley are suffering, as the drought kills the crop. Grass fed cows are also suffering as the grass dies. Only the producers of wine and soft fruit are happy - the heat increases the sugar content in the fruit making it sweeter.

In France the river water is now too warm to cool their 58 nuclear reactors, and they have had to cut output at two reactors. France is a net exporter of electricity, so this will hurt them. The hot still weather means that wind turbines are not moving. Countries with a mix of solar power in their energy mix are doing OK, but a lot of northern Europe invested heavily in wind power only.

In places like California, Japan and South-East Asia, the heavy use of airconditioning is causing power prices to surge, and California has been close to blackouts.

Lets hope the rain comes soon.