The mood improved in London on Thursday after the Bank of England decided to leave interest rates steady for now, but left the door open to a first rate cut in August. The BoE's decision follows data showing that inflation returned to its target of 2.0% in May, down from 2.3% in April. The FTSE 100 ended yesterday's session up 0.8%.

The index opened slightly higher on Friday, but retreated a bit by mid-morning. UK retail sales volumes surged by 2.9% in May, significantly higher than the expected 1.5% increase, according to the Office for National Statistics (ONS). This follows a revised 1.8% decline in April. Year-on-year, retail sales rose by 1.3% in May, defying expectations of a 0.9% decline. Consumer confidence in the UK also improved, with GfK's consumer confidence index rising by three points in June to minus 14. This marks the third consecutive monthly increase since March.

Shares in Britvic surged by 15% after the company rejected a takeover proposal from Carlsberg Group. The offer valued Britvic at £3.09 billion, but the board concluded that it significantly undervalued the company. Informa, an information publisher and events organizer reported double-digit year-to-date revenue growth and expects 2024 results at the upper end of its guidance.

Shares in United Utilities and Severn Trent rose by 3.0% and 1.6%, respectively, after JPMorgan upgraded the water utilities to 'overweight' and 'neutral'.

Investors are awaiting the release of purchasing managers' index (PMI) figures later in the day, which could provide further insights into the economic outlook.

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