Inflation accelerates again in October: Urban inflation hit its highest level in four years in October on the back of surging food prices. The annual rate of inflation rose to 16.2% during the month from 15.0% in September, according to figures (pdf) released Thursday by state statistics agency Capmas. This is the highest level since October 2018, when it recorded 17.68%. On a month-on-month basis, urban inflation rose 2.6% in October, accelerating from 1.6% in September.

Food was the main driver: Food and beverage costs — the biggest component of the basket used to measure inflation — jumped 23.8% y-o-y from 21.7% in September.

But there are inflationary pressures throughout the economy: Annual core inflation, which strips out volatile items such as fuel and food, jumped to a near-five-year high of 19.0% in October, up from 18.0% the previous month, according to Central Bank of Egypt data (pdf). This is the 14th month in a row that core inflation has accelerated.

We haven’t seen anything yet: October’s data doesn’t reflect the impact of the decision by the CBE to float the currency at the end of the month, which has led to the EGP falling almost 24% against the greenback. “The upcoming months, mainly November and December, are likely to reflect the full pass-through effect of the EGP devaluation,” Al Ahly Pharos analyst Esraa Ahmed wrote in a note Thursday. “This would coincide with unfavorable base effect during 4Q 2022 and 1Q 2023, fueling expected annual inflation readings that might hit the 20% y-o-y border for some months.” Meanwhile, analysts at CI Capital see the rate averaging 18% between November and February due to the depreciation of the currency and the repealing of the government’s import restrictions.

Goodbye 7% target: The central bank is planning to scrap its 7% (±2%) target and will announce a new target range before the end of the year.