Europe midday: Shares slip into red on gloomy outlook

European shares had slipped into the red by late morning on Friday as investors eyed US payrolls data later in the day.

The pan-European Stoxx 600 was down 0.28%, with all major regional bourses in the red.

Europe's benchmark index has made gains over the week on the back of a deluge of corporate earnings, offsetting concerns of an economic slowdown against a backdrop of rising interest rates and geopolitical tensions.

Signs of tougher times ahead came on Thursday as the Bank of England lifted interest rates by 50 basis points as it predicted UK inflation would peak above 13% in October with the economy entering a prolonged recession in the fourth quarter.

US non-farm payrolls are expected to post a rise of 250,000 jobs in July compared with 372,000 in June.

“Given the shift in emphasis in this week’s comments from Fed policymakers the better the number will likely determine how aggressive the Fed is likely to be when it comes to tackling inflation with the phrase “front-loading” being used quite a lot,” said CMC Markets analyst Michael Hewson.

“A weak jobs number could temper the Fed’s hawkishness, but it would have to be a shockingly low number, or even negative.”

In equity news, advertising giant WPP fell, despite lifting annual sales guidance after a rise in interim profits, as investors fretted about the gloomy economic outlook ahead.

Deutsche Post shares gained after the company reported double-digit growth in revenue and earnings and confirmed its outlook for 2022, driven by a strong performance in its freight and express business.

Reporting by Frank Prenesti at Sharecast.com