Uganda's inflation rises to 5.4 percent in May

KAMPALA (Reuters) - Uganda's overall inflation rose to 5.4 percent year-on-year in May from 5.1 percent a month earlier, fueled by a surge in core inflation, the Uganda Bureau of Statistics (UBOS) said on Tuesday. Core inflation - which excludes food, fuel, electricity and metered water - increased to 7 percent from 6.4 percent in April. The central Bank of Uganda watches core inflation for its monetary policy decisions. Policymakers are due to meet on June 14 to set the Central Bank Rate (CBR) for the next two months and businesses are watching to see whether the bank loosens its policy stance again. In April the central bank made a surprise cut, lowering the rate to 16 percent from 17 percent, saying it needed to boost growth after an improvement in inflation outlook. Annual non-food inflation rose to 6.8 percent during the month, from 5.8 percent the previous month, the statistics office said. Prices also rose for footwear, clothes and other non-food items. (Reporting by Elias Biryabarema; Editing by George Obulutsa and Angus MacSwan)