Surge in dairy and grain prices offsets lower utility bills, while underlying inflation climbs to 4.0%, complicating Central Bank policy.

NAIROBI — Kenya’s annual consumer price inflation accelerated to 6.8 per cent in September 2026, driven by relentless pressure on basic food commodities and persistent transport costs, according to official data released by the Kenya National Bureau of Statistics (KNBS).

The year-on-year headline figure rose from 6.6 per cent in August 2026, marking a continuation of an upward trajectory that began in April 2026 when inflation stood at 5.6 per cent. On a month-on-month basis, the Consumer Price Index (CPI) climbed 0.4 per cent to reach 156.47, up from 155.85 in August.

The figures underscore a difficult economic environment for Kenyan consumers, as price increases remain concentrated in critical household expense categories. Together, three major expenditure divisions—Food and Non-Alcoholic Beverages, Transport, and Housing, Water, Electricity, Gas and Other Fuels—account for over 57 per cent of the total weight in the national consumer basket.

Food and Transport Drive Cost-of-Living Squeeze

The Food and Non-Alcoholic Beverages division, which carries the heaviest weighting in the basket at 32.9 per cent, surged 9.5 per cent year-on-year and grew 0.9 per cent from August.

Dairy products and basic staples led the monthly uptick:

• Long-Life UHT Milk (500ml): Rose 8.0 per cent in September to KSh 61.64.
• Fresh Packeted Milk (500ml): Advanced 6.0 per cent to KSh 61.23.
• Fresh Unpacketed Milk (1L): Increased 5.8 per cent to KSh 77.54.
• White Wheat Flour (2kg): Rose 4.5 per cent to KSh 181.11.
• Irish Potatoes (1kg): Climbed 3.3 per cent to KSh 121.98 (+33.6 per cent year-on-year).

These increases were partially tempered by seasonal declines in select produce and key staples. Tomatoes declined 4.1 per cent month-on-month to KSh 106.44 per kilogram, while sifted maize flour eased 0.6 per cent to KSh 152.00 per 2kg bag. Sugar prices also drifted lower by 0.4 per cent to KSh 165.79 per kilogram, representing a 10.5 per cent price drop compared to September 2025.

The Transport division posted a steep year-on-year inflation rate of 15.6 per cent, reflecting sustained high pump prices. Retail prices for petrol (KSh 214.95 per litre) and diesel (KSh 219.04 per litre) remained unchanged month-on-month, but stood 15.8 per cent and 26.9 per cent higher, respectively, than a year ago. However, transport inflation dipped 0.4 per cent month-on-month, helped by a 20.0 per cent decline in inter-town public transport fares (such as Isiolo to Nairobi, which dropped from KSh 1,500 to KSh 1,200) and a 0.3 per cent dip in city matatu fares. Conversely, international airfare costs rose 8.1 per cent over the month.

Utility Relief Offsets Household Fuel Gains

The Housing, Water, Electricity, Gas and Other Fuels division rose 3.2 per cent year-on-year, but increased by a modest 0.1 per cent month-on-month. Electricity tariffs provided relief to domestic budgets, as prices for 50 kWh dropped 2.4 per cent to KSh 1,258.21, while 200 kWh fell 2.2 per cent to KSh 5,533.76. Liquefied Petroleum Gas (LPG/13kg cylinder) prices eased 0.2 per cent month-on-month to KSh 3,419.24.

However, non-grid fuels experienced upward pressure. Firewood prices gained 1.8 per cent, while charcoal climbed 1.6 per cent month-on-month to KSh 99.52 per kilogram (+7.2 per cent year-on-year). Residential rent for single-room bed-sitters remained unchanged from August at KSh 7,690.07 per month.

Core Inflation Spikes to 4.0%

For policymakers at the Central Bank of Kenya, the most concerning signal in the September release is the sharp tick-up in core inflation. Core inflation—which excludes volatile energy and fresh produce prices to track underlying price stability—rose to 4.0 per cent year-on-year, up from 3.4 per cent in August and 2.0 per cent in December 2025.

Non-core inflation stood at 14.0 per cent year-on-year. Of the overall 6.8 per cent inflation rate, core items contributed 4.2 percentage points, while non-core items contributed 2.6 percentage points. Food and non-alcoholic beverages alone accounted for 2.8 percentage points of the total rate, while transport added 1.6 percentage points.

The acceleration in core measures suggests that price pressures are increasingly broadening into manufactured food, health services (+2.8% YoY), education (+3.0% YoY), and accommodation services (+3.0% YoY), which could prompt monetary authorities to maintain a hawkish stance.

Key National Average Retail Price Changes

Notes 

Source: Kenya National Bureau of Statistics (KNBS). (2026, September). The Kenya Consumer Price Index and Inflation Report: September 2026. Nairobi, Kenya

How Inflation Affects Your Money:

Yuthufu.com

Curious how much your Kenyan Shilling has changed in value? See what 1 KES from 1963 could buy today using our inflation calculator available at yuthufu.com