Kenya inflation rises in August after fuel prices climb

NAIROBI (Reuters) - Kenya's inflation rate increased to 6.67 percent in the year to August from 6.02 percent a month earlier, the statistics office said on Friday, a rise which had been expected because of higher fuel prices and a new VAT law. Inflation has roughly remained within the government's preferred medium-term range of 5 to 7 percent since August last year. The central bank kept its key rate at 8.50 percent in July to allow previous cuts to filter through the economy. The next meeting of the monetary policy committee is on September 3. A Reuters survey of 16 economists taken over the past week forecast rates would stay on hold until at least the end of this year to counter rising inflation and pressure on the shilling. Duncan Kinuthia, head of trading at Commercial Bank of Africa, said before the announcement: "Unless inflation goes beyond 7 percent I don't see ... (the central bank) acting yet." Analysts had expected inflation to rise partly due to higher fuel prices and the coming into effect of a new VAT law that increases the number of goods and services subjected to the tax.