Repeated and disruptive heatwaves this summer are expected to have cost the UK economy more than £4bn in lost output by the end of July, according to new analysis.

Environmental thinktank Verdant previously estimated that June’s unusually hot conditions caused £2.36bn in economic damage. After expanding its assessment to cover July’s high temperatures, it now puts the total loss at £4.4bn.

With temperatures climbing again this week, Verdant director James Meadway said: “The economic consequences of climate change are already being felt and are likely to become more severe in the years ahead. Government measures to shield workers and businesses from extreme heat are long overdue.”

Immediate economic losses occur because employees in many sectors become less productive during heatwaves, while infrastructure and machinery can overheat and may need to be temporarily shut down.

This week’s amber warning for extreme heat in England follows three earlier UK heatwaves in May, June and July. The Met Office has said the country is on track to experience its hottest summer on record.

Verdant is urging the government to introduce a legal maximum workplace temperature and to prepare compensation for workers forced to reduce their hours during periods of dangerous heat.

The report also highlights the need to invest in redesigned urban areas, including the creation of cooler, greener spaces across British towns and cities.

Verdant’s calculations do not include indirect expenses, such as tackling wildfires or increased electricity use from fans and air-conditioning systems. The thinktank believes London and south-east England are likely to have suffered the greatest losses because temperatures there have been highest.

If heatwaves intensify at the same pace seen over the past decade, the organisation estimates that the annual economic cost could exceed £25bn by 2030.

Verdant bases its calculations on Europe-wide research from insurer Allianz, which indicates that hourly worker output drops by 3% for every degree temperatures rise above 30C.

These estimates broadly align with research by the Grantham Research Institute at the London School of Economics. It calculated that June’s heatwave alone reduced output by more than £1bn as employees worked fewer hours or performed less effectively because of the heat.

In a survey of 2,000 people, institute researchers found that 3.6% of respondents did not work at all during the week beginning 22 June because of extreme temperatures. Meanwhile, 87% experienced at least one health-related effect, ranging from poor sleep to dizziness.

Economists are increasingly warning about the growing financial impact of severe weather, including the possibility of higher inflation as droughts, floods and wildfires disrupt food production and push up prices.

Almost three-quarters of England has now been officially declared in drought following successive heatwaves, which have also affected large parts of Europe this summer.

London mayor Sadiq Khan recently cited this year’s extreme temperatures as evidence that Labour should challenge opponents of net zero and remain committed to its climate goals. “The climate emergency has arrived, and nobody can claim it was unexpected,” he said.

Paul Nowak, general secretary of the TUC, said: “As climate change brings more frequent heatwaves, workers are suffering and productivity is falling. Many people have experienced this first-hand while trying to continue working in oppressive conditions.

“Trade unions want regulations requiring employers to lower workplace temperatures once they exceed 24C. Work should stop when temperatures reach 30C, or 27C for physically demanding roles.”