Tesco Reports 'Encouraging Early Signs' of Easing Grocery Inflation as Regulatory Scrutiny Intensifies

Chief executive Ken Murphy believes it is "past the peak of inflation" and hopes prices will moderate through the rest of the year.

Tesco's update comes as the food sector faces regulatory scrutiny on its pricing and the government is examining the potential for food price caps.

Tesco's like-for-like sales, excluding fuel, rose 9% to £10.8bn in the 13 weeks to 27 May.

However, there was no data on sales volumes.

Tesco has been accused of lacking transparency over its Clubcard discounts, and the Competition and Markets Authority is examining the grocery and fuel industry for any failure of competition that could mean consumers are being overcharged.

Supermarket competition ensures value, but the sector argues that punitive costs remain, especially in the supply chain.