Britain’s largest supermarket chain has declared that inflationary pressures have “lessened substantially”, as it reported a jump in profits.
Tesco has posted a 12.8% rise in adjusted operating profit for the last financial year, up to £2.8bn, and a 7.4% rise in group sales.
The chief executive, Ken Murphy, said the group is encouraged by signs that consumer sentiment is improving, and offers hope that the worst of the cost of living squeeze may be over.
He said: "Inflationary pressures have lessened substantially, however, we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.
"We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices."
Tesco is expecting to grow its profits this year; telling shareholders it expects retail adjusted operating profit of at least £2.8bn in 2024-25.
On a statutory basis, Tesco’s pre-tax profits swelled to £2.3bn from £882m in 2022, up 159.5%.
The credit rating agency Fitch has fired a shot across Beijing’s bows, by cutting the outlook on China’s debt.
Fitchhas revised the outlook on China’s long-term foreign currency issuer default rating to negative from stable today, warning that risks to China’s public finance outlook are rising.
China, Fitch points out, is facing “more uncertain economic prospects” as it transitions away from growth based on its property sector, where a construction boom has burst.
Fitch also kept China’s credit rating at A+, which is the fifth-highest investment grade rating, but the new negative outlook implies this rating could be cut in coming months.
Fitch identifies several threats to China’s fiscal stability, including a rising deficit, increasing government debts, and risks posed by the “local government financing vehicles” used to fund property projects.
Investors around the world are poised for the latest US inflation report, due this afternoon. It is expected to show a small pickup in the pace of price rises, lifting the US CPI rate to 3.4% from 3.2%.
But core inflation could keep slowing, perhaps down to 3.7% from 3.8%.
The US central bank, the Federal Reserve, wants to push inflation lower, so today’s data will influence how soon it can cut interest rates.
The agenda • Noon BST: US weekly mortgage applications • 1.30pm BST: US inflation report for March • 2.45pm BST: Bank of Canada interest rate decision
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