Strain on households mounts as inflation holds stubbornly above 6pc

Shoppers at a supermarket in Nairobi. [Edward Kiplimo, Standard]

Kenyan households are facing mounting financial pressure as annual inflation accelerated to 6.5 per cent in July from 6.4 per cent in June.

This was largely driven by soaring food and transport costs that are eroding disposable incomes and heaping political pressure on President William Ruto's administration with just under 14 months to go before the next General Election.

The price increases were primarily driven by items in the food and non-alcoholic Beverages division, which rose 9.0 per cent, and Transport, which surged 15.6 per cent over the past year.

These two categories alone account for over 42 per cent of the total weight across the 13 major expenditure categories tracked by the Kenya National Bureau of Statistics (KNBS).

According to data released on Friday by the KNBS, the Consumer Price Index (CPI), which measures the weighted average change in retail prices paid by consumers for a fixed basket of goods and services, rose to 155.20 in July from 154.91 in June. The year-on-year inflation rate climbed from 6.4 per cent in June to 6.5 per cent.

The accelerating inflation data presents a significant political challenge for President Ruto, who came to power in 2022 on a platform of economic transformation and lower living costs.

With the electoral clock ticking, the sustained cost-of-living crisis threatens to undermine public confidence in the government's economic management and is likely to intensify criticism from opposition leaders over fiscal and monetary policy direction.

"The overall index increased from 154.91 in June 2026 to 155.20 in July 2026, resulting in a monthly inflation rate of 0.2 per cent," the KNBS report stated. "The year-on-year inflation stood at 6.5 per cent in July 2026."

Economists also track core inflation, which strips out volatile items such as fresh produce and energy to gauge underlying demand pressures, while non-core inflation captures these erratic price swings.

In July, core inflation stood at a relatively modest 3.2 per cent, but non-core inflation was a searing 15.0 per cent, underscoring that supply-side bottlenecks, not just monetary factors, are driving household pain.

This distinction matters for policymakers. This is because interest rate hikes by the Central Bank of Kenya (CBK) do little to tame a poor harvest or global oil prices, leaving the embattled Ruto administration with limited tools to ease the squeeze ahead of the polls.

Fresh produce continued to exert upward pressure on household budgets. Potatoes (Irish) recorded a sharp 2.1 per cent monthly price increase, while mangoes registered the largest gain at 3.2 per cent, the bureau reported.

On a year-on-year basis, potatoes surged 28.4 per cent, while kale (sukuma wiki) – a staple vegetable for most Kenyan families – jumped 26.8 per cent. Beef with bones rose 1.0 per cent month-on-month and 10.7 per cent year-on-year.

The national average retail price of potatoes climbed from Sh111.10 per kilogramme in June to Sh113.46 in July, while beef rose from Sh760.75 to Sh768.34 over the same period. Onions increased 0.8 per cent month-on-month and 11.2 per cent year-on-year.

There were some reliefs. Tomato prices fell 3.7 per cent month-on-month to an average of Sh113.47 per kilo, while carrots declined 3.6 per cent and sifted maize flour dropped 1.6 per cent.

However, these declines did little to offset the broader upward trajectory in food costs that has left many urban households struggling to put food on the table.

Transport inflation remained the most punishing category at 15.6 per cent annually. While fuel prices were held unchanged during the review period, with diesel retailing at Sh224.04 per litre and petrol at Sh214.95 – the cumulative effect of previous hikes continues to weigh heavily on consumers.

City bus and matatu fares from Koja to Westlands rose 0.3 per cent month-on-month and a staggering 16.8 per cent year-on-year.

Housing, water, electricity, gas and other fuels – the third major inflation driver – rose 3.2 per cent annually.

Electricity costs proved particularly painful, with the 200 kWh consumption bracket rising 3.1 per cent month-on-month and the 50kWh bracket increasing 3.5 per cent. The average price for the 200kWh bracket climbed from Sh5,476.34 in June to Sh5,648.30 in July.

Cooking gas (LPG) offered a rare bright spot, declining 1.1 per cent month-on-month to an average of Sh3,432.21 for a 13-kilogram refill. Kerosene prices remained flat at Sh192.56 per litre.

The KNBS data revealed that core inflation contributed 3.8 percentage points to the overall inflation rate, while non-core inflation contributed 2.7 percentage points. Food and non-alcoholic beverages alone contributed 2.6 percentage points to the overall inflation.

"Core inflation contributed 3.8 points, while non-core inflation contributed 2.7 points to the overall inflation in July 2026," the report noted.

The Ruto administration has previously pointed to global factors, including supply chain disruptions and the war in Ukraine, as drivers of inflation.

However, with the July data showing persistent price pressures across essential goods and services, the CBK's tight monetary policy stance appears increasingly blunt against supply-side shocks.

For millions of Kenyan households, the reality is painful. A single room rent rose 0.2 per cent month-on-month to an average of Sh4,225.93. Sugar prices, while down 10.4 per cent year-on-year, remain elevated at Sh167.41 per kilo. Cooking oil (salad) held relatively stable but still costs Sh358.09 per litre, up 3.8 per cent from a year ago.

With the electoral clock ticking, the pressure on the Kenya Kwanza government to deliver tangible relief to ordinary Kenyans has never been greater, the KNBS data shows.