Tesco boss Sir Terry Leahy said that he was confident of economic recovery this year despite doubts that increased taxes in the UK would hamper growth.

Speaking from the sidelines of a retail conference in Belgium, Leahy said: “It’s a careful balance you have to strike in terms of maintaining the stimulus and then paying down the costs of that stimulus.

“But I think the consumer recovery has taken hold in the UK and there’s still more of the stimulus package around the world to be spent in 2010 … so I would be confident (of an economic recovery).”

Last week at the National Retail Federation conference in New York, Leahy said that he believed climate change and healthcare were among six drivers that retailers could use to grow coming out of the recession.