The UK’s warmest summer on record has produced mixed results for businesses in south-west England and the Channel Islands, with some traders reporting higher visitor numbers and stronger demand for food and drink, while others say prolonged dry conditions cut output.

Provisional Met Office figures put the mean temperature for June, July and August at 16.5C (61.7F), the highest in a series stretching back to 1884. The Met Office said on 1 September that the figure was 1.9C above the 1991-2020 average and beat the previous record of 16.1C set in 2025, according to its summer 2026 statement. Rainfall over the three months was 195.4mm, 77 per cent of the seasonal average.

Meteorologists in Jersey and Guernsey confirmed both islands had their warmest summers on record, with average temperatures of 20.5C (68.9F) in Jersey and 18.9C (66.2F) in Guernsey.

The Avon Inn in Avonwick, Devon, reported a rise in trade after adding more outdoor seating. Manager Eda Iannone said the pub had seen “a fantastic summer for footfall”.

“We took a lot more bookings and we put a lot more outside events on with confidence, knowing that with the UK being weather dependent, they would go well,” she said.

Not every seasonal business gained from the heat. Christian Hocking, of ice cream seller Hocking’s in Appledore, Devon, said trade had been steady but customers were choosing water over ice cream because the heat suppressed appetite. “When it gets too hot, it does actually gets too hot for ice cream,” he said.

Separately, analysis by the thinktank Verdant put lost UK output from repeated heatwaves at £4.4bn by the end of July, citing reduced worker productivity and equipment shutdowns.

Guernsey Dairy said dry spells and high temperatures affected milk volumes from local farms, although supplies remained sufficient to meet daily demand across the island. Operations director Andrew Tabel said: “Our local dairy farmers and production teams have worked incredibly hard throughout this prolonged period of hot and dry weather.”

Rocquette Cider in Guernsey expects its apple harvest to be about 80 per cent lower than normal as a result of the hot weather. Manager James Miller described the outlook as “appalling”.

“The grass is very dry, we haven’t had to mow the grass at all,” Miller said. “The trees have been suffering, I think the only moisture they’ve been getting is from morning dew.”

He added: “Last year we had a good harvest, so we have a lot of cider stored which will carry us through, but two bad years would be devastating.”

The cider maker’s experience follows warnings from the Food and Drink Federation that drought will push up food prices into 2027, and a move by NatWest to offer repayment holidays to farming customers hit by reduced yields.

Tina Bessell of Cornish Lavender, based between St Agnes and Perranporth, said the heat produced a “fantastic” oil yield, although visitor numbers to the site fell on the hottest days. “The farm has loved the heat,” Bessell said. “I think I must be the only farmer in the South West that is happy with the heat.”

The National Trust for Jersey said extreme weather was affecting St Ouen’s Pond, where low water levels and algal growth are threatening a habitat used by migrating birds.

“Normally at this time of year we’d have all sorts of visitors like green sandpipers, curlews and we’ve had spoonbills visit us at this time of year before,” said Jon Parks of the trust. “They’re all looking for that wetland habitat, a chance to feed and there’s no water there, there isn’t that opportunity unfortunately.”

Parks said extreme summers were a “major contributing factor” to the problems at the pond, but stressed they were not the only cause.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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SYDNEY — Australian shares traded essentially flat Monday afternoon, with the benchmark S&P/ASX 200 index sitting at 9,006.0, up just 0.1 points, as energy stocks offset broader caution tied to a renewed weekend escalation between the United States and Iran and persistent expectations of further Reserve Bank interest rate tightening.

The muted session followed a soft finish on Wall Street Friday, when strong U.S. jobs figures further ratcheted up expectations for additional Federal Reserve rate hikes, with key inflation data still to come later in the week. U.S. stock markets were closed Monday for the Labor Day holiday, leaving international exchanges, including the ASX, to absorb weekend developments in the Middle East without guidance from American markets.

Capital.com senior market analyst Kyle Rodda pointed directly to the latest flare-up in the ongoing conflict as a key factor weighing on investor sentiment heading into the new week.

“The US and Iran exchanged fire over the weekend, with both targeting tankers as the battle for control over the Strait of Hormuz continues,” Rodda said.

The renewed hostilities followed news that the United States struck three Iranian oil tankers over the weekend, in what American officials described as retaliation after U.S. warships were targeted with ballistic missiles. The exchange added to more than six months of sustained conflict centered on the strategically vital Strait of Hormuz, through which a significant share of the world’s seaborne oil trade normally passes.

Energy stocks were the clear standout on the local market Monday, with the sector rising more than 1% as Brent crude prices climbed to $96.60 a barrel, extending a sustained rally tied to the ongoing disruption to Persian Gulf shipping. That strength in the energy sector provided a meaningful offset to weakness elsewhere in the market, helping keep the broader ASX 200 near breakeven for the session despite the unsettled geopolitical backdrop.

Monday’s flat session followed a modestly negative close to the previous trading week. The ASX 200 slipped 14.2 points, or 0.16%, to finish at 9,006 on Friday, reversing earlier gains and leaving the index down almost 1% for the week overall, as stronger-than-expected Australian GDP data for the June quarter revived market expectations for another Reserve Bank rate increase later this month. Sentiment heading into the new week was also tempered by anticipation of key economic data due from China, including August consumer and producer price figures along with trade performance numbers, alongside continued digestion of the robust U.S. payrolls report.

Interest rate markets have continued pricing in the likelihood of further Reserve Bank tightening, with traders factoring in roughly 13 basis points of expected tightening for the RBA’s September policy meeting and a full 25-basis-point increase priced in for the central bank’s Melbourne Cup Day meeting on Nov. 3. That hawkish repricing has continued to weigh on rate-sensitive sectors of the Australian market, particularly the major banks, even as resource-linked stocks have found support from elevated commodity prices tied to the ongoing Middle East disruption.

Australia’s housing market has added a further layer of pressure on the banking sector specifically. Continued declines in home prices nationally, which analytics firm Cotality has said could result in the largest housing downturn in 40 years, combined with the persistent grind higher in long-end bond yields, have weighed on major lenders including Commonwealth Bank in recent sessions.

Beyond the immediate market moves, broader statistics compiled by Market Index underscored just how challenging September has historically proven for the Australian market. According to the firm’s analysis, September stands as the ASX 200’s worst-performing month on record, a seasonal pattern that has added to investor caution even as individual sessions this month have shown mixed results.

Regional markets elsewhere in the Asia-Pacific traded considerably stronger than Australia on Monday. Japan’s Nikkei 225 added nearly 1%, with the broader Topix index up 0.55%, while South Korea’s Kospi advanced 3.09% at the open and the smaller-cap Kosdaq gained 1.33%, reflecting a notably more risk-on tone across other regional markets even amid the same weekend developments in the Middle East weighing on Australian sentiment specifically.

In individual company news, South Korean electronics giant LG Electronics saw its shares jump more than 8% Monday following local media reports that the company is exploring a pre-IPO fundraising round for its robotics subsidiary, Bear Robotics. According to reports citing investment banking sources, Bear Robotics, in which LG Electronics reportedly holds a 56.9% stake, has engaged Bank of America to lead a funding round ahead of a planned Nasdaq listing, seeking to raise up to 400 billion won, or roughly $297 million, at a valuation of approximately 2 trillion won.

President Donald Trump has continued to frame the broader U.S. objective in the ongoing conflict with Iran as centered on preventing Tehran from acquiring nuclear weapons capability, even as the administration simultaneously pursues diplomatic engagement alongside its continued military operations. U.S. Energy Secretary Chris Wright, speaking on ABC News’ “This Week,” indicated that a formal nuclear agreement with Iran may not be reached anytime soon, suggesting American strategy could instead focus more heavily on directly degrading Iran’s nuclear infrastructure rather than securing a broader negotiated settlement.

With U.S. markets closed for the holiday and international exchanges left to independently digest the weekend’s developments in the Middle East, Monday’s session offered a preview of the themes likely to dominate Australian trading throughout the week: the trajectory of oil prices amid the ongoing Strait of Hormuz conflict, the path of Reserve Bank policy following recent hawkish domestic economic data, and upcoming inflation readings from both the United States and China that could further shape the direction of global risk appetite as the week progresses.