Kenya’s annual consumer price inflation rose to 6.8 percent in September, up from 6.6 percent in August, as sharply higher transport costs and elevated food prices continued to erode household purchasing power.

According to data released on Wednesday by the Kenya National Bureau of Statistics, September inflation ranks further above the midpoint of the Central Bank of Kenya’s preferred 2.5–7.5 percent target band. 

On a monthly basis, the Consumer Price Index edged up 0.4 percent, from 155.85 in August to 156.47, extending a steady climb that began in April.

Core inflation, which strips out food and fuel and is seen as a better gauge of underlying price pressures, rose to 4.0 percent from 3.4 percent in August. Non-core inflation, meanwhile, stood at 14.0 percent, down only marginally from 14.7 percent a month earlier. 

Core inflation contributed 4.2 percentage points to the overall rate, while non-core added 2.6 points, a striking reversal from earlier in the year, when volatile prices did most of the heavy lifting.

Transport was the single largest driver on a year-on-year basis, with prices in the division surging 15.6 percent owing to higher pump prices. Petrol averaged KSh 214.95 a litre in September, up 15.8 percent from a year earlier, while diesel rose 26.9 percent to KSh 219.04. 

Kerosene climbed 23.5 percent. On a monthly basis, however, transport recorded a rare 0.4 percent decline, as inter-town matatu fares fell 1.0 percent and city bus fares eased 0.3 percent. International airfares bucked the trend, rising 8.1 percent.

Food and non-alcoholic beverages, which carry the largest weight in the index at nearly 33 percent, rose 9.5 percent year-on-year and contributed 2.8 percentage points to headline inflation. 

Within the basket, fresh packed cow milk recorded one of the sharpest monthly increases, rising 6.0 percent to KSh 61.23 for a 500-millilitre packet, while fresh unpacked milk rose 5.8 percent to KSh 77.54 a litre. 

White wheat flour climbed 4.5 percent month-on-month and cabbages rose 6.2 percent. Tomatoes provided modest relief, falling 4.1 percent to KSh 106.44 a kilogram, while sifted maize flour dipped 0.6 percent to KSh 152 for a two-kilogramme packet and sugar fell 0.4 percent.

Housing, water, electricity, gas and other fuels rose 3.2 percent year-on-year, a relatively contained increase helped by falling electricity tariffs. The cost of 200 kilowatt-hours dropped 2.2 percent month-on-month to KSh 5,533.76, and the 50-kWh unit fell 2.4 percent to KSh 1,258.21. 

Charcoal, an energy commonly used by lower income households, increased by 1.6 percent in September alone and 7.2 percent over twelve months.

The Central Bank of Kenya has held its benchmark rate steady in recent months, betting that inflation would remain within the target band. 

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