European reconstruction bank cuts growth forecasts; Elon Musk ‘not invited to UK investment summit’ – business live | Business

Back in the UK, Elon Musk’s comments about this summer’s UK riots have cost him a place at next month’s International Investment Summit, the BBC reports.

The Summit is part of the Labour government’s push to stimulate economic growth, by attracting more spending to the UK, and is expected to take place at a central London location.

The goal is to show that the UK is “open for business” under a new government.

But, the BBC’s Faisal Islam reports that Musk, currently the world’s richest person, has not been invited to the International Investment Summit in response to his social media posts during last month’s riots, explaining:

During the August riots, Mr Musk shared, and later deleted, a conspiracy theory about the UK building “detainment camps” on the Falkland Islands for rioters, on X – the social media platform he owns.

At the time ministers said his comments were “totally unjustifiable” and “pretty deplorable”.

Last month, Downing Street criticised Musk after he posted on X that “civil war is inevitable” under a video of violent riots in Liverpool.

The Guardian reported earlier this week that business leaders have warned that the global investment summit risks falling flat, amid growing frustrations over high costs of involvement and its timing two weeks before the budget.

Stephen Phipson, the chief executive of Make UK, which represents 20,000 manufacturing firms across the country, said:

“It’s the wrong way round. There is a concern about the timing, coming two weeks before the budget.

People will want to know what the government’s priorities are before committing investment.”

The European Bank for Reconstruction and Development has also cut its growth forecast for Ukraine, warning that it is taking an economic hit from Russian attacks on its energy infrastructure.

The EBRD lowered its forecast for Ukraine’s economic growth to 4.7% next year from 6% in May due to the attacks, following an expected expansion of 3% this year.

Those attacks are forcing Ukraine to rely on more expensive imports as it builds alternative sources of energy, the EBRD points out/

Their chief economist, Beata Javorcik, told Bloomberg:

“More than half of electricity generation capacity was destroyed.

Now, some of the gap is being filled by imports of electricity from Europe, but this electricity comes at a higher cost. So that puts energy intensive industries at the disadvantage.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Europe is struggling to cope with much higher energy prices than the US and a lack of investment, putting the brakes on growth, the European Bank for Reconstruction and Development (EBRD) has warned.

The bank, which lends to countries across eastern Europe, central Asia and north Africa, revised down its expectations of growth this year and next year, saying many countries would be unable to grow more quickly following a resurgence in gas and electricity prices, my colleague Phillip Inman reports.

While oil prices have stabilised at around the average levels seen between 2017 and 2021, “gas in Europe remains relatively expensive, trading at almost five times the US price, and some economies in the EBRD regions are paying significantly higher average import prices for gas than Germany.” the bank said in its latest Regional Economic Prospects report.

Expected growth across the EBRD region this year was downgraded by 0.2 percentage points from a previous forecast in May to 2.8%.

In 2025, it expects growth of 3.5%, 0.1 percentage point below the previous projection.

“Our economies are steadily adjusting to evolving global dynamics,” said Beata Javorcik, the EBRD’s chief economist.

“The easing of inflation and recovery in real wages offer encouraging signs.”

However, “ongoing vigilance” would be required as economies adapt to renewed inflationary pressures, concerns about energy security following a flare-up in the middle east conflict, trade wars and high interest rates.

Javorcik said high energy prices and a lack of investment had brought Europe to a “crisis point”.

Earlier this month Mario Draghi, a former prime minister of Italy, told EU leaders they needed to club together and spend about 4.5% of the economic bloc’s annual income on investment to boost long term growth prospects.

Javorcik said the report, which was dismissed by German finance minister Christian Lindner, would provide the basis for a discussion about Europe’s competitiveness and the need for investment finance across all 27 EU nations.

The agenda

• 7am BST: German consumer sentiment report from GfK

• 1.30pm BST: US GDP report for Q2 2024 (final reading)

• 2.30pm Christine Lagarde speech at a conference on “New Frontiers in Macroprudential Policy” in Frankfurt.

• 2.20pm BST: Federal Reserve chair Jerome Powell to speak at the 2024 US Treasury Market Conference in New York