Worst of the recesssion is over, says Tesco boss

Tesco chief executive Sir Terry Leahy has said the worst of the recessio is over for the UK economy as the retailer reported a 1% rise in pre-tax profit for the first half of the financial year.

Leahy said: "We are past the low point, things are getting better" as Tesco posted a pre-tax profit figure of £1.2bn.

Leahy said Tesco's half-year performance was "solid". But the 8.6% rise in underlying profit to £1.5bn was the smallest increase in 11 years.

Total sales rose 9.3% to £27.8bn. The dividend was increased by 9% to 3.89p. Investors, relieved at recent trading, topped up their holdings, sending the shares up 0.70p to 396.5p.

Leahy added: "There are signs of recovery and people feel their finances are under control. Some well known sectors that have been hit hard, Organic and Finest, are back and there has been strong growth in ready meals."

He also announced that Tesco Personal Finance, which made a £115m trading profit on sales of £420m, is to be renamed Tesco Bank.