The rate of inflation hit a 14 month high in April as analysts warned of further increases in the prices of consumer goods in coming months.

Rising food and fuel prices have driven up the cost of living, with experts warning that inflation was likely to rise above the 30 per cent mark .

"There is every reason to believe that the inflation rates will edge up," said Charles Ocholla, the investment banking manager at Suntra Investment Bank. Latest figures from the Kenya National Bureau of Statistics show that inflation increased to 26.6 per cent from 21.8 per cent in March as effects of high food prices continue to eat deep into consumers' pockets.

This is the highest level the month on month inflation rate has hit since 1994 when it stood at an average of 28.8 per cent.

The price of key commodities, including milk, bread and cooking fat have nearly doubled over the past three years and moved at the quickest pace in the last eight months.

Increased household expenditure is eating deep into the savings of the high income Kenyans while the lower earners are cutting their expenditure on basic commodities.

"Food and non-alcoholic drinks' index increased by 4.0 per cent from 363.05 in March 2008 to 377.59 in April 2008 mainly due to increases in the price of tomatoes, carrots, maize flour and English potatoes, among other food items," said the bureau in a statement last Friday.

During the past month, the price of a kilogramme of tomatoes increased by 44.6 per cent from Sh45.75 to Sh66.15, with a kilogramme of carrots retailing at Sh55.61 from Sh39.62, representing a rise of 40.4 per cent. Maize flour, which is Kenya's staple food, went up 14 per cent to Sh70 from Sh60.

For Kenyans, the rising cost of living is a big blow as it sets in at a time when the economy is facing a slowdown following the political violence that gripped the country in the first two months of the year over the controversial tallying of the presidential elections.

Policy analysts say the country might not hit its growth targets due to the political turmoil with talk it could knock at least three percentage points off the country's economic growth this year.

The economy grew at the rate of 7.1 per cent last year.

As a result of the expected slow down in the economy, earnings in formal employment are not expected to keep pace with the inflation levels, leaving those in employment with weaker purchasing power. A survey by consultancy firm PricewaterhouseCoopers expects wages to grow by an average of eight per cent this year.

Because of this, trade unionists are warning that threat of increased industrial action was looming as workers pile pressure on the union officials to press for better salaries.

With food experts talking of an acute food shortage in the coming months, it is clear that Kenyans should brace for tough times ahead.

The expected food scarcity is attributed to the disruption of the production chain following the political turmoil, which displaced farmers in the agricultural heartland of Rift Valley, coupled with a sharp rise in farm inputs, which has pushed farmers to cut on their acreage under crop.

The expected food shortages would spark a sharp rise in food prices, setting the stage for record inflation levels given that the food index accounts for more than half the overall inflation index. This will be made worse by the sky high prices of oil, which dealers predict will remain high for the better part of the year.

Last week, crude oil prices hit $117 a barrel, having risen from $88 at the start of the year on increased demand for the commodity and fears over supply of the commodity.

Local oil marketers are also showing a preference for expensive fuel with many saying that the sky-high fuel pieces are here to stay.

A litre of unleaded fuel has hit Sh99 in Nairobi up from Sh84 in mid December.

But with indications that barrel prices are likely to remain high, players in the oil market say the prospects of pump prices crossing Sh100 does not sound remote.

The price increase would affect manufacturers and transporters, among other businesses, which would be reflected in higher prices for commodities.

"When fuel prices go up, everything goes up, so I expect an increase in general commodities," said Mr Peter Wachira, senior investment manager at AIG Investments in an earlier interview.