Heatwaves and energy crunch: Can Europe withstand a double shock?

Heatwaves are squeezing growth and productivity while the Iran war drives up Europe’s energy costs.

Wildfires are burning, crops are failing and rivers are running dry. Europe is baking under its fifth heatwave of the year. Economists warn extreme heat is becoming an economic risk – hitting output, tourism, food prices, insurance, and public budgets all at once. The bill? An estimated $209bn this year, roughly 1 percent of EU GDP.

Dutch bank Triodos says that wipes out almost all the growth the bloc was expected to generate in 2026.

Europe’s economy is already under pressure from higher energy prices driven by the Iran war.