Sharecast - At 0825 BST, the FTSE 100 was flat at 7,274.79, while sterling hit a 15-month high against the dollar.
Figures released earlier by the Office for National Statistics showed that wages grew 7.3% in the three months to May, unchanged on the previous month - which was revised up from 7.2% - and coming in above expectations for a 7.1% increase.
The ONS said that for regular pay, this marks the highest growth rate, which was also seen last month and during the Covid pandemic period for April to June 2021.
Including one-off bonuses, wages rose 6.9% during the period, up from 6.7% and versus expectations of 6.8% growth.
The data also showed that the unemployment rate was 4% in the three months to May, up from 3.8% in the previous three months.
Richard Hunter, head of markets at Interactive Investor, said: "UK markets opened for business in typically subdued mood, with labour market figures providing something of a mixed bag."
He said that while some mitigation came in the form of an unexpected rise in unemployment, "the writing on the wall for further rate rises seems to have become clearer due to wage inflation".
"The likelihood of higher interest rates has also led to another uptick in sterling, which has a dampening effect on the FTSE 100 where the majority of earnings emanate from overseas. In addition, commodity prices have been under pressure on the prospects of weakening Chinese demand, while the average dividend yield of 3.9% across the index has become much less of an attraction given the rates now available in other asset classes, especially bonds.
"A highly tentative switch out of defensive stocks into more cyclical sectors provided scant relief in opening trade, although the strength of conviction remains to be seen."
Investors were also mulling a survey from the British Retail Consortium and KPMG, which showed that total retail sales increased by 4.9% in June as the warmer weather brought shoppers out for items such as beach towels and barbeque food.
The rise compared with a fall of 1% in June last year and is above the three-month average growth of 4.6% and the 12-month average growth of 4.0%.
On a like-for-like basis, retail sales increased by 4.2% in June, against a decline of 1.3% in June 2022. Food sales increased 9.8% on a total basis and 10.1% on a Like-for-like basis over the three months to June, while non-food sales rose 0.3% on a total basis and fell 0.5% on a like-for-like basis over the three-months to June.
"Retail sales growth ticked up slightly in June as hot weather prompted purchases of summer essentials. Sun-seekers headed to their favourite retailers to buy swimwear and beach towels, and outdoor games, garden furniture and barbecue food were boosted as families came together to celebrate Father’s Day," said BRC chief executive Helen Dickinson.
However, she added that people were much more cautious about big-ticket purchases like furniture and technology equipment.
"Consumer confidence remains fragile. But, with headline food inflation easing for two months in a row as prices of essentials start to fall thanks to stiff competition and consumers continuing to shift shopping patterns to mitigate as much inflation as they can, confidence could improve."
In equity markets, energy company Centrica (LON:CNA) ticked higher after saying it had signed an $8bn deal with US-based Delfin Midstream to buy 1.0 million of liquefied natural gas a year for 15-years.
Property owner British Land gained after saying it continued to see strong operational momentum in the business, despite ongoing macroeconomic uncertainty, with its retail parks proving to be a "winning format".
Melrose spinoff Dowlais slumped as Citi initiated coverage of the stock with a ‘sell’ rating and 97p price target, which implies around 20% downside.
Market Movers
FTSE 100 (UKX) 7,274.79 0.01%
FTSE 250 (MCX) 18,085.50 0.32%
techMARK (TASX) 4,307.68 0.01%
FTSE 100 - Risers
SEGRO (SGRO) 718.40p 1.76%
Land Securities Group (LAND (LON:LAND)) 574.60p 1.66%
Prudential (LON:PRU) 1,055.00p 1.53%
Anglo American (LON:AAL) 2,223.00p 1.41%
Rio Tinto (LON:RIO) 4,931.50p 1.40%
Antofagasta (LON:ANTO) 1,438.50p 1.38%
CRH (CDI) (LON:CRH) 4,254.00p 1.26%
Fresnillo (LON:FRES) 610.80p 1.26%
Persimmon (LON:PSN) 1,002.00p 1.14%
Ocado Group (LON:OCDO) 588.20p 1.13%
FTSE 100 - Fallers
AstraZeneca (NASDAQ:AZN) 10,092.00p -0.86%
Imperial Brands (LON:IMB) 1,719.00p -0.86%
Pershing Square (NYSE:SQ) Holdings Ltd NPV (PSH) 2,814.00p -0.85%
Vodafone Group (LON:VOD) 70.05p -0.84%
GSK (GSK) 1,312.80p -0.53%
Compass Group (LON:CPG) 2,063.00p -0.53%
HSBC Holdings (LON:HSBA) 603.80p -0.51%
Relx plc (REL) 2,468.00p -0.49%
Hiscox Limited (DI) (LON:HSX) 1,060.00p -0.47%
Coca-Cola (NYSE:KO) HBC AG (CDI) (CCH) 2,352.00p -0.47%
FTSE 250 - Risers
Liontrust Asset Management (LON:LIO) 688.00p 5.12%
Future (FUTR (LON:FUTR)) 763.50p 3.88%
Urban Logistics Reit (SHED) 112.80p 3.30%
British Land Company (BLND) 310.60p 2.64%
UK Commercial Property Reit Limited (UKCM) 49.65p 2.37%
Senior (SNR) 175.00p 2.34%
Ashmore Group (ASHM) 213.80p 2.17%
Energean (ENOG) 1,012.00p 1.71%
Tritax Big Box Reit (BBOX) 128.00p 1.67%
Vistry Group (LON:VTYV) (VTY) 658.50p 1.62%
FTSE 250 - Fallers
Ibstock (IBST) 133.30p -2.42%
Investec (INVP) 429.00p -2.01%
Chemring Group (CHG (LON:CHG)) 280.50p -1.58%
Helios Towers (HTWS) 86.30p -1.09%
Essentra (ESNT) 157.60p -1.01%
Polar Capital Technology Trust (PCT) 2,150.00p -0.92%
Carnival (NYSE:CCL) 1,347.00p -0.70%
Discoverie Group (DSCV) 857.00p -0.58%
Wood Group (John) (WG.) 133.00p -0.52%
Serco Group (LON:SRP) 152.00p -0.52%