Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Kenya inflation jumps in August, raises likelihood of interest rate hike

01 September 2014, 14:25

Nairobi - Rising food prices helped push up Kenya's inflation rate in August to its highest level since June 2012, the statistics office said on Monday, making it more likely that the central bank will lift interest rates in coming months.

Year-on-year inflation rose to 8.36 percent in August from 7.67 percent in the previous month, the Kenya National Bureau of Statistics said in a statement.

On a monthly basis, inflation rose 0.94 percent from July.

"With the (central bank rate) currently at 8.5 percent, we believe there is room for a modest rise in the policy rate by the end of the year," said Razia Khan, head of research for Africa at Standard Chartered Bank.

The central bank's Monetary Policy Committee (MPC) is due to meet on Wednesday to set rates and decide how to tame inflation.

The year-on-year inflation rate was above the central bank's preferred medium term range of 2.5-7.5 percent and also just higher than the consensus forecast of 7.89 percent.

The statistics office said the Food and Non-Alcoholic Beverages Index was up 1.75 percent from July, while the Transport Index was up 0.73 percent.

Khan said year-on-year inflation was expected to slow in September due to a base effect from a value-added tax law passed last year, then pick up after that.

"Today's CPI print will serve as a timely reminder that the room for any interest rate easing – even much more of a downward drift in short-term market rates - is limited," Khan said.

At its last meeting in July, the central bank held its benchmark lending rate at 8.50 percent, saying inflation remained in its target range and the pace of price rises had slowed.

- Reuters

For the latest on national news, politics, sport, entertainment and more follow us on Twitter and like our Facebook page!


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Shakila Alivitsa
4 ways to handle your cheating ma...

He is cheating. How do you handle him?

Submitted by
Shakila Alivitsa
Why do men choose second wives?

Why do men choose to have second wives?

Submitted by
Eugene Odanga
Wizkid set for twin Kenyan shows

Wizkid is back in Kenya. For two shows.

Submitted by
Eugene Odanga
Udada women's festival begins in ...

The Udada women's festival has arrived in Nairobi.

Submitted by
Uhuru pardons 2747 death row conv...

President Uhuru Kenyatta has pardoned a number of death row convicts, sending them to life sentences instead. Read more...

Submitted by
Eugene Odanga
WATCH: Kaka Sungura arrested in t...

Was Kaka Sungura arrested in town?