Sharecast - The FTSE 100 was called to open 27 points lower at 7,475.
Figures released by the Office for National Statistics showed that retail sales unexpectedly rose in May, by 0.3%, following a 0.5% increase in April. Analysts were expecting a 0.2% decline.
Non-store retailing sales volumes rose by 2.7%, mainly thanks to strong sales by online retailers selling outdoor-related goods and summer clothing. This was boosted by the warm weather in the second half of the month, the ONS said.
Ruth Gregory, deputy chief UK economist at Capital Economics, said: "The further rebound in retail sales volumes in May suggests the recent resilience in economic activity hasn’t yet faded.
"But we think it’s too soon to conclude the rebound in retail sales will be sustained and the economy will avoid a recession."
In addition, a survey out earlier showed that consumer confidence continued to push higher in June despite the ongoing cost-of-living squeeze.
The latest consumer confidence index from GfK showed a three-point rise in June to -24. While still in negative territory, the index is now well above the same month a year previously, when it was -41.
It is also the fifth consecutive increase, and the best showing for 17 months.
Within that, the personal financial situation measure for the coming year jumped seven points to -1, while the forward-looking general economic situation rose five points to -25.
The major purchase index, however, dipped a point to -25.
Joe Staton, client strategy director at GfK, said: "Despite the fierce economic headwinds of the cost-of-living crisis, double-digit grocery price increases and the mortgage squeeze severely impacting both homeowners and renters alike, the index improved by three points.
"Consumers are showing remarkable resilience in the face of inflation that is currently refusing to yield.
"If consumers continue to weather the current economic storm, this will provide a firm foundation for getting back to growth."
The survey was carried out before the Bank of England’s latest decision on interest rates, which saw the Monetary Policy Committee on Thursday up the cost of borrowing by a larger-than-expected 50 basis points, to 5%. Inflation currently stands at 8.7%, unchanged on the previous month.
