Hold-up for mortgagesfrom Tesco

The supermarket giant was aiming to launch home loans under its burgeoning bank operation by the end of the year, but is being held back by the Financial Services Authority (FSA), according to the Observer.

It is thought the delay comes as the FSA tightens up its rules in the wake of the credit crunch.

Tesco, which also hoped to launch a current account next year, may now reportedly have to wait up to a year before receiving permission from the FSA.

The supermarket announces half-year figures tomorrow – the last set of results for outgoing chief executive Sir Terry Leahy.

Its interims are expected to reflect ongoing tough trading in the sector after UK sales growth almost ground to a halt – at 1.1 per cent – in the first quarter as the grocer wrestled with plunging food inflation. It is a challenging time for incoming boss Philip Clarke to take the reins.

Tesco was not immediately available for comment.