Gap between rich and poor has reduced since 2008 crash - IFS
2 min read
The divide between the richest and the poorest households has narrowed since the 2007/08 economic crash, a respected thinktank has found.
In a new report the Institute for Fiscal Studies said a boost in employment alongside falls in income for middle and top earning households had helped to lessen inequality.
It said there was a particular narrowing in inequality in 2007/08 and in 2011/12 but the picture had not shifted a great deal since then.
The findings are surprising, as claims about rising inequality were a key feature of the election campaign.
Cuts to working-age benefits and a slow recovery in incomes had been offset by better than expected employment growth, which had benefited the poorest households the most, the thinktank added.
And it said there had been a “dramatic” fall in inequality in London but the capital remained the most unequal region in the UK.
Agnes Norris Keiller, a research economist at the IFS, said: "While London remains the most unequal part of the country, inequality in the capital has seen a dramatic decline over the last decade.”
The report also said levels of absolute poverty had not changed much over the past decade.
The Joseph Rowntree Foundation - which commissioned the research - said progress on reducing poverty had "stalled".
JRF head of analysis Helen Barnard said: "If you look back over the last decade, we've [seen] average income stagnating, they aren't very much higher than they were before the recession.
"The progress on reducing poverty has really stalled and what's now very worrying is we're now seeing poverty starting to tick up again so those groups for children and pensioners where poverty fell quite a lot for that, we're starting to see progress starting to be undone."
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