Source: Sharecast
The FTSE 100 was called to open around 15 points higher.
Figures from the Office for National Statistics showed that the unemployment rate ticked up to 4.6% in the three months to April from 4.5%, marking the highest level since July 2021.
Meanwhile, growth in average weekly earnings excluding bonuses fell to 5.2% from 5.6%.
Liz McKeown, director of economic statistics at the ONS, said: "There continues to be weakening in the labour market, with the number of people on payroll falling notably. Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.
"Our survey of businesses shows a stronger picture for Workforce Jobs, but this covers an earlier period, includes people with multiple jobs and can lag our other sources of labour market information.
“Earnings growth has slowed in both cash and real terms, though it remains strong by historic standards. Public sector pay is now growing at a higher rate than wages in the private sector."
Kathleen Brooks, research director at XTB, said: "The latest UK labour market update showed a softening in the jobs market last month and a drop in wage growth, most notable for private sector workers.
"The unemployment rate rose a notch, and the ONS reported that firms may not be recruiting new workers or replacing workers who have left. Overall, this is a grim labour market survey, and if this trend continues, it could spell worrying times for the UK economy."
In corporate news, Mike Ashley’s Frasers Group said any bid for troubled cosmetics retailer Revolution Beauty would be all cash.
"There can be no certainty that an offer will be made for Revolution Beauty nor as to the terms on which any offer might be made," the Sports Direct owner said, a day after it emerged the group was conducting due diligence on a potential purchase, sending shares in its target surging 10%.
Housebuilder Bellway said that trading has been "robust" through the spring selling season, with its forward order book increasing by 7.7% year-on-year and comprising 5,759 homes as of 1 June.
Overall average selling prices were now expected to be around £315,000, up from £307,909 on 31 July, while volume output was pegged to be between 8,600 and 8,700 homes in FY25, up from 7,654 homes.
Bellway also continues to expect underlying operating margins to approach 11.0%, ahead of the prior year's 10.0%.
The FTSE 250-listed group said it was now fully sold for the current financial year and that, if market conditions remain stable, it "remains well-positioned" to deliver cumulative volume growth of 20% in the two years to 31 July 2026.