The cost of the Floods

Evan Davis, the BBC's Economics editor, in his latest blog has estimated the economic costs of the current flooding in the UK and pondered what this would mean economically if this is a precursor to more regular bouts of flooding caused by global warming.

In summary:

• Evan estimates the cost at around £5 billion.
• £5 billion represents under 1/2% of GDP. So small in the big picture.
  
• News stories tend to over-embellish damage done and we tend to over-estimate its economic importance.
• This would be more important if it represented a regular economic cost, say every few years, rather than a one in sixty year event.
• Infrastructure may need to be made more weather-proof at significant expense.