Leahy explained that strains placed on shoppers by factors, such as rising oil prices, outweighed the benefits of the recent rate cut.
'Just look at what's happening to the consumer,' Leahy said at Tesco's interim results presentation. He added that higher bills and fuel prices are creating a more cautious spender.
Tesco finance director Andrew Higginson said rising oil prices are not making life easier for the retailer either. '[Oil] prices are 50 per cent higher than last year. This feeds through to electricity and even carrier bags,' he said.
'Rising oil prices do mount a challenge,' said Leahy. 'We've had to work very hard not to pass the cost through to the consumer.'
The bulk of the retailer's spending on oil feeds into store energy costs and fuel for trucks.
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