Europe midday: Shares surge after week of turmoil

The pan-European Stoxx 600 was up 1.16% in early deals with all major bourses higher.

Investors fear an economic slowdown that may turn into as inflation starts to curb consumer spending. Eyes will be on the final reading of euro zone inflation for May later in the day.

''There is unlikely to be sustained relief from the sinking feeling that has hit financial markets this week, as worries rise that countries around the world won’t avoid falling into the economic pit of recession,” said Hargreaves Lansdown analyst Susannah Streeter.

“After the initial boost of optimism that the Federal Reserve was going to get a handle on inflation with the 0.75% rate rise, the mood soured on Wall Street as concerns mounted that the price spiral was going to be an even harder nut to crack, without fresh aggressive hikes.”

“A flurry of rate rises around the world in Taiwan, Switzerland, Hungary and the UK prompted fresh uneasy sentiment, particularly the warning from the Bank of England that inflation is set to soar to 11% this autumn.”

Eurozone inflation rose to a record high 8.1% in May, in line with a preliminary estimate, from 7.4% in April, the European Union's statistics agency Eurostat said on Friday.

Inflation excluding food and energy costs raced to 4.4% from 3.9%. A 39% rise in energy costs was the main driver, with unprocessed food prices up 9% and non-energy industrial goods prices 4.2%. The price of services, where wages are a key cost, rose by 3.5%.

In equity news, UK retail giant Tesco slipped after it said it was seeing early indications of changing customer behaviour due to surging inflationary pressures.

Miners were lower, but Glencore bucked the trend following an upbeat trading update.

Specialist publisher Future gained 5% as it said it was on track to meet full-year expectations after making an encouraging start to the second half.

Reporting by Frank Prenesti at Sharecast.com