London pre-open: Stocks seen flat as investors mull jobs data

The FTSE 100 was called to open unchanged at 7,860.

Figures released earlier by the Office for National Statistics showed that wages grew at their fastest rate in more than 20 years in the three months to November.

Regular pay, excluding bonuses, was up 6.4% on an annual basis. Excluding the Covid pandemic, this marks the biggest jump since records began in 2001. Adjusted for inflation, however, wages were down 2.6%.

The data also showed that the unemployment rate ticked up to 3.7% in the three months to November, from 3.5% in the previous quarter.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The latest labour market data maintain the pressure on the MPC to raise interest rates by another 50 basis points next month, rather than slow down."

In corporate news, mining giant Rio Tinto said China's dismantling of Covid-19 restrictions raised risks of labour and supply-chain shortages as it reported a 4% increase in iron ore shipments in the fourth quarter.

The coming months would bring “high volatility”, Rio said as China faced a surge in coronavirus cases, which would increase short-term risks of supply chain disruptions and labour shortages across the country.

"Steel demand recovery hinges on the country’s ability to control the Covid outbreak," Rio Tinto said, adding that consumers remain cautious of China's property market, which had been supportive to the economy, and that slowing global demand poses some risk to its exports.

Elsewhere, Ocado Retail - a 50:50 joint venture between Ocado and Marks & Spencer - posted an uptick in fourth-quarter sales and customer numbers, but average basket size fell as shoppers bought less.

Fourth-quarter retail revenue edged up 0.3% versus the same quarter a year earlier, coming in below the company’s guidance for mid-single digit sales growth.