Tesco chief executive Sir Terry Leahy warned this morning that political and regulatory interference could hamper retail’s role in helping the economy out of recession.

Speaking at the BRC annual conference in London, Leahy said the situation on the high street remained “fluid” .

“Retailers can help power us out of recession,” he said, “but only if the government doesn’t add more to the burden of regulation and taxes”.

Leahy said consumer confidence was “slowly creeping back” but said that clouds remain on the horizon, “the darkest being unemployment”.

Leahy added that winning and retaining customer loyalty was vital to riding out the recession and emerging a winner once it ends, even if it meant some short-term pain to the business.

“Retailers need to reward those customers who stay with them” he said.