The European Bank for Reconstruction and Development downgraded its economic forecasts Wednesday, noting that the energy price shock triggered by the Middle East war penalised Europe more than the United States, AFP reports.

“Electricity prices in Europe are also much higher than in the United States,” the London-based EBRD said in its latest outlook report, which also focused on countries in the Middle East and Africa where it invests.

The bank predicted that gross domestic product would slow to 3.1 per cent across its regions of operation this year from 3.4pc in 2025, with Europe more dependent on hydrocarbon imports than the United States.