Europe midday: Shares hold gains despite bleak German outlook
European shares held gains on as shares in Aveva surged on a report that the French industrial group Schneider was close to a takeover of the UK software maker.
The pan-European Stoxx 600 rose 0.31% with all major bourses higher. Investors were also eyeing US inflation data later in the day.
In the UK, data released by the Office for National Statistics showed that real wages continued to fall in July, while the jobless rate dipped to its lowest level since 1974 as more people dropped out of the workforce.
The unemployment rate fell to 3.6% in the three months to July from 3.8% in the previous quarter. Economists were expecting the rate to be unchanged.
Meanwhile, total pay including bonuses rose 5.5% on the year, up from 5.2% and versus expectations of 5.4% growth. Meanwhile, regular pay grew 5.2%, up from 4.7% and compared to consensus expectations of 5.1% growth.
In real terms, however, total pay fell 2.6% and regular pay was down 2.8%.
"It's not often that you see the unemployment rate fall to the lowest in almost 50 years and aren't overjoyed, but that will certainly be the feeling at the Bank of England right now, said Oanda market analyst Craig Erlam.
"Less labour market slack and faster wage growth increase the odds of a 75-basis point hike from the Monetary Policy Committee next week, especially against the backdrop of higher core inflation expectations over the medium term as a result of the new cap on energy bills."
In Germany, investor sentiment continued to deteriorate in September amid worries about the energy crisis and a slowdown in China, according to a survey by the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index fell by 6.6 points from August to -61.9. Meanwhile, the current situation index slid to -60.5 in September from -47.6 the month before.
The gauge of economic sentiment regarding the eurozone fell 5.8 points to -60.7 points in September.
August inflation in Europe's largest economy was also confirmed at 7.9%, up from 7.5% in July, according to statistics office Destatis.
Consumer price inflation had declined slightly both in June and July due to temporary government measures.
In August, consumer prices rose 8.8% on year by European Union harmonised standards, Destatis said on Tuesday.
The figure was driven by further increases in food and energy inflation. Food inflation climbed to 16.6%, from 14.8% in July, while household energy inflation increased to 46.4%, from 42.9% in the month before.
In equity news, Aveva shares topped the Stoxx with a jump of 3.38%, while Schneider Electric rose 0.9%. Sky News reported late on Monday a takeover worth £3.5bn was close for the 40% the French firm does not already own.
Media company Future gained as its said full-year adjusted operating profits were projected to be at the "top end" of market expectations of £266.4m to £270.7m after a return to organic audience growth in the second half, with Covid comparators fully lapped.
Shares in UK online supermarket Ocado plunged as the company said it expected a small fall in annual sales as customers started to tighten their belts amid the cost-of-living crisis.
The supermarket, a joint venture between Ocado Group and retailer Marks & Spencer, also said it now expected close to break-even core earnings. It had previously forecast low single digit revenue growth and a low single digit profit margin.
Reporting by Frank Prenesti at Sharecast.com