Do people read literature in Harry Potter? Fiction books are rarely mentioned in the series, and none of the characters seem to read novels. We understand that a majority of teenage students aren’t prone to pick up Chaucer just for the fun of it, but you would think a bookworm like Hermione would occasionally peruse Dickens, especially since other forms of entertainment, such as television and computers, aren’t common in the magical world.
The most straightforward example of pleasure reading shows up in Chamber of Secrets:
Ron’s school spellbooks were stacked untidily in a corner, next to a pile of comics which all seemed to feature The Adventures of Martin Miggs, the Mad Muggle. Ron’s magic wand was lying on top of a fish tank full of frogspawn on the windowsill, next to his fat grey rat, Scabbers, who was snoozing in a patch of sun.
Chamber of Secrets - page 35 - Bloomsbury -- chapter three, The Burrow
Wizards generally may not read Muggle literature -- aside from Dumbledore -- but they do seem to read about Muggles.
"Hope springs eternal", quotes Dumbledore in Tales of Beedle the Bard.
To which J.K. Rowling notes:
[This quotation demonstrates that Albus Dumbledore was not only exceptionally well read in wizarding terms, but also that he was familiar with the writings of Muggle poet Alexander Pope. JKR]
Tales of Beedle the Bard - Bloomsbury -- The Tale of the Two Brothers
In Flourish and Blotts (during the Chamber of Secrets and Goblet of Fire films) we see several books that might be read for fun
It's certain in canon that there is wizard literature - think of Gilderoy Lockart, who made a living writing books, so obviously they are bought and read... And I think Ron mentions that his mum is reading romantic wizarding love novels, but I don't recall where...
But I don't think that there is canon evidence that wizards read the muggle literature - it's possible, but maybe unlikely as the wizard community tries to separate from the muggle society. Muggleborns might be another case, depending on their parent's they might get introduced to muggle literature and might like it - but that's all speculative.
Magical children, at least read The Tales of Beedle the Bard.
“Oh come on! All the old kids’ stories are supposed to be Beedle’s, aren’t they? ‘The Fountain of Fair Fortune’...‘The Wizard and the Hopping Pot’...‘Babbitty Rabbitty and her Cackling Stump’...”
—Harry Potter and the Deathly Hallows
Certain wizards or witches (hint: Dolores Umbridge) may read Beatrix Bloxam's Toadstool Tales instead:
It was summed up best, perhaps, by Beatrix Bloxam (1794-1910), author of the infamous Toadstool Tales. Mrs Bloxam believed that The Tales of Beedle the Bard were damaging to children because of what she called “their unhealthy preoccupation with the most horrid subjects, such as death, disease, bloodshed, wicked magic, unwholesome characters and bodily effusions and eruptions of the most disgusting kind”.
Mrs Bloxam took a variety of old stories, including several of Beedle’s, and rewrote them according to her ideals, which she expressed as “filling the pure minds of our little angels with healthy, happy thoughts, keeping their sweet slumber free of wicked dreams and protecting the precious flower of their innocence”.
—The Tales of Beedle the Bard
Gilderoy Lockhart's books, while based on (someone else's) true stories were nonetheless heavily fictionalized. They seemed to be general in the style of adventure novels, featuring Lockhart himself, and were of course hugely popular.
As mentioned in another answer, Ron read a comic called The Adventures of Martin Miggs, the Mad Muggle.
As indicated in a picture from Fantastic Beasts and Where to Find Them (the film version), there may be a wizarding novel called Cassandra and Her Cat Gustavus.