Inflation drops to 4.8%
Data from the statistics house shows that average annual headline inflation has reduced by 0.6 percentage points to 4.8% in August due to lower food, fuel, energy and utility prices.
The Consumer Price Index (CPI), the official measure of inflation is the rate at which prices rise over a given period of time. Annual headline Inflation dropped from 5.4% in July 2015.
Some data collection centers like Kampala Middle and Low Income, Masaka and Kampala high income experienced higher inflation than other regions at 6%, 5.5% and 5.1% respectively due to high prices of clothing, footwear, rent, meals in restaurants and other goods and services.
The annual core inflation, a component of headline inflation which excludes food, fuel, electricity and metered water prices rose to 5.5% in August from 5.4% in July.
Core inflation is used as a basis for setting the benchmark Central Bank Rate (CBR) which in turn affects commercial bank lending rates. A rise in core inflation can lead to a rise in lending rates.
In annual terms between 2015 and 2014, food inflation declined to 5.1% at the end of August from 6.8% in July. However, in monthly terms, food inflation increased by 0.5% in August from 0.4% in July.