LONDON, April 10 Reuters Tesco, Britain39;s biggest retailer, is seeing an improvement in consumer sentiment, its boss said on Wednesday, highlighting easing inflation and strong employment levels as key factors.

There is loads of uncertainty out there but I see a gentle improvement in customer sentiment and our business is in really good shape, so on the whole I39;m feeling quite positive, CEO Ken Murphy told reporters after the supermarket group reported annual results.

The principle thing is that you39;re seeing an easing of inflation and an easing of energy prices and that39;s probably the two key indicators for me, he said.

And at least on the face of it employment is holding up quite well.

Murphy39;s comments chimed with recent survey data showing improving confidence among UK consumers about the outlook for their finances.

An early Easter boosted food spending in Britain last month, lifting retail sales by the most since August, though wet weather dampened demand for garden furniture, home improvement products, clothing and footwear, the British Retail Consortium said on Tuesday.

Food inflation fell to 3.7 in March, according to the most recent industry data.

Tesco is, however, from this month facing the cost headwinds of a 9.1 rise in store workers39; hourly pay and higher business taxes.

Reporting by James Davey; editing by Sarah Young

Source Reuters