US inflation falls to 8.5% in July but still close to multi-decade high

Gas prices drop sharply after a hitting a national average of $5 a gallon in mid-June

The pace of price rises dipped in the US in July as gas prices eased, bringing down the annual rate of inflation to 8.5%, still close to a multi-decade high but lower than the four-decade peak it hit in June.

July's figure, while still high, represents a significant fall from the annual rate of 9.1% recorded in June and will raise hopes that inflation has finally peaked in the US. It follows other indicators that have suggested price rises are moderating.