Tesco coins it in as cost of family shopping basket soars

SUPERMARKET giant Tesco today announced increased profits of £2.85 billion – as new figures showed food prices are rising at their fastest rate for 17 years.

Tesco raked in just short of £100,000 a minute in sales over the last year to record an 11.8 per cent rise in profits. The company, which

has around 30 per cent of the UK grocery market, said the results had been achieved despite poor summer weather and stronger competition from rivals.

Chief executive Sir Terry Leahy said: "We begin the new financial year confidently."

But statistics on UK food prices showed the cost of an average shopping basket is now 11 per cent more than a year ago.

Figures compiled by website MySupermarket.co.uk show some dramatic rises, ranging from semi-skimmed milk – up 17 per cent from £1.68 for six pints last year to £1.96 now – to British beef mince – up 64 per cent from £1 for 500g to £1.64 now – and a 500g packet of fusilli pasta, up 81 per cent from 37p to 67p.

The website calculated that a family spending £100 a week on groceries a year ago would now be paying an extra £572 a year.

Meanwhile, David Cameron launched a searing attack on Gordon Brown for being "arrogant" and "out of touch" today as fears grew over the perilous state of Britain's economy.

The Tory leader said that the Government had wasted money "on a gargantuan scale" in the past decade, when it should have been preparing for leaner times.

His comments came as the Prime Minister held talks with bankers in Downing Street over how to minimise fallout from the global credit crunch.

Number 10 said they discussed the "next steps" in securing the financial system amid evidence of a worrying slump in property prices.

However, there was better news for Mr Brown when inflation figures showed the official rate had held steady at 2.5 per cent last month – rather than rising as many had expected.

A high street price squeeze by retailers offset higher transport costs.

The Prime Minister was later due to call on oil-exporting countries to ease pressure on energy prices by stepping up production. Mr Brown is also set to have talks with senior figures in Wall Street tomorrow during a three-day visit to the United States.

But, speaking on BBC radio, Mr Cameron lambasted the Government for profligate spending since 1997, insisting it should have been putting money aside instead.

Mr Cameron added: "I think they have wasted money on a gargantuan scale and there are many areas where we would have avoided that waste."

The Tory leader also hit out at Mr Brown's decision to abolish the 10p rate of income tax – which has caused great disquiet among Labour backbenchers.