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Staying afloat: the impact of flooding on UK firms

Author

Listed:
  • Benjamin Crampton

    (Bank of England)

  • Rupert-Hu Gilman

    (Bank of England)

  • Rebecca Mari

    (Bank of England)

Abstract

This paper examines the exposure of UK firms to flood risk and the impact that past floods have had on corporate outcomes. Through the use of a novel data set that combines highly granular business premise information with flood maps and financial records, we first identify the specific regions, sectors and characteristics of firms where flood risk is most concentrated. Firm-level exposure is significantly influenced by sorting dynamics, with larger premises being more at risk. Second, we demonstrate that flood impacts are highly damaging to firms: they significantly increase the likelihood of business termination for small and medium-sized firms; for surviving firms, there are large negative impacts to revenue, employment, and total assets, with large firms and those in natural resource-related sectors being most affected.

Suggested Citation

  • Benjamin Crampton & Rupert-Hu Gilman & Rebecca Mari, 2026. "Staying afloat: the impact of flooding on UK firms," Bank of England Staff Working Paper series 1187, Bank of England.
    • Handle: RePEc:boe:boeewp:023309
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2026/staying-afloat-the-impact-of-flooding-on-uk-firms.pdf
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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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