00:00Deputy Director of Macroeconomic Modelling and Forecasting at the think tank NIESR.
00:05Joining us now, Stephen, you've heard, I think, what our correspondents are saying.
00:09If we look at the big picture, how disruptive could this extreme weather end up being if it becomes the
00:14new normal?
00:15Well, if it becomes the new normal, it'd be extremely disruptive, just as your correspondent just said.
00:21At the minute, for the UK as a whole, the hit to GDP is actually not that large.
00:27But there are obviously areas where you can already see disruption.
00:32Trains were being cancelled on my line tonight as I was taking the train home.
00:39Retail, you can see that shoppers are not going out as much, and that hits retail.
00:46And health care as well.
00:48There's a big increase in admittances to hospitals.
00:52And at the same time, actually, a couple of hospitals have run into problems with their cooling systems.
00:59You know, if you think of the smaller businesses, you know, the independent sandwich shop, the local hairdresser, the family
01:05-run pub,
01:06how equipped are they likely to be as heat increases?
01:11Yeah, much less so than the big companies.
01:14I mean, as your correspondent says, the big retailers, places like Oxford Street, they have air conditioning in all of
01:21the big shops.
01:23And actually, that brings more people in because they become refugees against the heat.
01:27But your small local businesses will just typically not have the wherewithal to actually equip their stores with air conditioning.
01:37So they are much more likely to be hit, indeed, than the larger companies.
01:43And we've heard just earlier today London's mayor, Sadiq Khan, addressing this directly with a plan.
01:49Clearly, it's been months in the making, the heat-ready London plan.
01:52What are your thoughts on that plan and the role that government is going to have to play?
01:57Well, it's excellent to see that the mayor has spent some time and has gathered, actually, institutions from across London.
02:06Because the thing is, if we are going to tackle the problem of dealing with the higher temperatures, then it's
02:13got to be a joint effort.
02:14It's got to involve the government, the local government, the boroughs, various health care, fire, emergency services, but also individuals
02:24as well, the private sector.
02:26They all try and equip, better equip the city for dealing with the heat.
02:31But it's good to see that the plan is there.
02:33It's good to see that they're focusing on provision of water for people, provision of more trees, more shade.
02:43Those are important.
02:45Retrofitting houses, that's important.
02:47And also that they notice that the heat tends to affect poorer households more than it does richer households.
02:54So they've built in, if you like, a priority of trying to level up, help the poorer households deal with
03:06the heat, because they're the ones who suffer more.
03:08Yeah, and a lot of adaptation will have to happen.
03:10Most of the houses in Europe are simply built to keep the heat in, because it's always been so cold.
03:15We're now approaching a new way, with lots more hot summers ahead.
03:21It's also going to affect, and is already affecting, consumer behaviour.
03:25What is your sense of how things are going to change?
03:29Well, I mean, the big thing is that we are going to have to start introducing air conditioning into houses.
03:36I mean, the UK housing stock is actually much older than typical other countries in Europe.
03:42And that creates a problem, because our houses are not very good at staying warm in the winter.
03:47And equally, they're really bad at staying cool in the summer.
03:50So we will have to retrofit a lot of air conditioning.
03:56And I think the other thing is we're going to notice a big change in behaviour as people work from
04:02home more.
04:03So to avoid having to go into city centres on hot days, we're likely to see more shopping from home
04:11on hot days as well.
04:12So lots of behavioural adaptations.
04:16But I guess, as I said up front, the big thing really is going to be adapting the housing stock
04:21to match the new normal.
04:23All right. Thank you so much for your insights.
04:25Stephen Millard, Deputy Director of Macroeconomic Modelling and Forecasting at the think tank NIESR.
04:30Thank you so much for your insights.
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