Consumer prices in Uganda rose 0.7 percent in September from the previous month but the year-on-year rate of inflation plummeted to 5.4 per cent from 11.9 percent a month earlier, the statistics office said on Friday.A fall in food prices over the twelve months helped leave the headline inflation rate in east Africa’s third biggest economy at its lowest level since January, 2011. Some economic analysts said the consumer price data paved the way for a fifth straight rate cut.Food price inflation fell 2.9 per cent year-on-year compared with a 4.2 per cent increase in August, the Uganda Bureau of Statistics said.Non-food inflation slowed to 10 per cent year-on-year from 16 per cent in August, it said.Razia Khan, head of Africa research at Standard Chartered, said much of the fall was due to base effects. Inflation in east Africa’s third biggest economy surged to more than 30 percent last year, forcing an aggressive tightening of monetary policy.It embarked on an easing cycle in June after a sustained fall in inflation.“Regional food price pressures have also been benign, so it’s not like this is entirely about the base effect,” Khan told Reuters“The inevitable question will be how much of a rate cut we see from the Bank of Uganda next week.”Bank of Uganda has cut its key lending rate in each of the last four months, knocking off a total six percentage points to leave the benchmark rate at 15 percent.The bank’s Monetary Policy Committee meets on Oct. 2.The core rate of inflation, which excludes food crops, fuel, electricity and metered water, dropped to 4.8 per cent from a revised 11.4 per cent in August.Only last month, the central bank had said it saw core inflation at 7 per cent by the end of the year and forecast a further fall to 5 per cent in the first half of 2013.
