US inflation eases in July as petrol prices drop

Prices in the US continued to rise rapidly last month, but a fall in petrol costs helped to ease the pace.

The annual inflation rate, the pace at which prices rise, was 8.5% in July, down from June when it surged to 9.1%, the Labor Department said.

Aside from energy, costs for many items, including groceries and housing, continued to rise.

The higher costs have left many families struggling and had a significant impact on the economy.

Jobs growth remains strong, but other indicators, like consumer and business sentiment, have been hit by worries about the rising prices, which are climbing faster than they have since the early 1980s.

The US central bank has been raising interest rates since March to fight the problem. Increasing interest rates is one way to try and control inflation as it raises borrowing costs and should encourage people to borrow and spend less. It can also encourage people to save more.