Europe open: Shares up as Siemens gains; Traders wait on UK budget

European shares were higher at the open, driven by strong results from Germany’s Siemens while investors also waited for a return to austerity in the UK as the government prepared to introduce higher taxes and public spending cuts to placate bond traders.

The pan-European Stoxx 600 index was up 0.47% at 0835 GMT, while Germany’s DAX was up almost 1% as Siemens posted an upbeat quarterly earnings statement as its factory hardware and software continued to be in demand.

British finance minister Jeremy Hunt is expected to spread pain across the board in his Autumn Statement as a response to the car crash of a mini-budget in September – so bad it now has its own Wikipedia entry - which spooked bond markets.

Hunt is expected to freeze tax thresholds to drag millions more people into the revenue net at a time when they face inflation of 11.1%, a four-decade high, crippling energy bills that will surge again in April just as the government turns off the support lifeline, rising interest rates and a looming recession, if it isn’t here already.

"With upward pressures on prices and wages, the government can raise extra taxes by freezing thresholds on levies such as income tax, inheritance tax and VAT...in a way that is more optically palatable then announcing big swathes of tax increases at a time when the cost of everything from energy to food to mortgages is on the rise," said Victoria Scholar, analyst at Interactive Investor.

London's FTSE 100 index was 0.26% lower in morning trade.

In other equity news, shares in Royal Mail owner International Distributions Systems fell as industrial action and weak parcel volumes hit profits at the 500-year-old postal carrier.

Reporting by Frank Prenesti for Sharecast.com