This is more than four times the UK average of 160,000 pounds. In the central London borough of Westminster, the average property sells for around 670,000 pounds, having doubled in 10 years, according to the Nationwide House Price Index. What is happening in London is an exaggeration of a process that has gathered pace across most developed economies, in which society is becoming “hourglass shaped”, with a bloated super rich elite, a large underclass and little in between. It makes it difficult for cities to manage, and we’re becoming much more of a low-paid economy with this big top,” he says. “That’s very bad for running economies, because you don’t have this continuum, you don’t have aspirations. The absence of a middle puts the brakes on social mobility and aspiration, he argues, because there is no realistic passage out of the bottom income brackets. It’s actually a vanishing middle, or a shrinking middle,” says Stewart Lansley, economist and author of a book about income inequality. “I think the concept of the squeezed middle is misplaced. London’s score rose from around 34 in 2002 to 36.2 in 2010, well above 32.4 for the rest of the UK and an OECD average of around 32. The GLA uses the Gini score, a common measure of income distribution that rises from 0, representing total equality, to 100, where all income goes to one person. SHRINKING MIDDLEĭata compiled by London’s administrative authority the GLA shows inequality in London has risen in the last decade. Of all Britain’s regions, only London and its surrounding southeast and eastern regions have less than a fifth of the population in the middle income group. Splitting the population into five income brackets, the study found that Inner London had 30 percent of people in the poorest fifth of the population, 27 percent in the richest and just 12 percent - the UK’s lowest concentration - in the middle fifth.
In London, wealth disparities are even more pronounced.Ī study by the UK government’s Department for Work and Pensions shows central London is Britain’s most unequal region.
London, some warn, may be drifting closer to the population profile of the latter.Īccording to the OECD, income inequality among adults has risen faster in Britain than in any other developed country since 1975. Land values and other economic variables bear little relation to national trends.īut while it is a rare bright spot in a sluggish British economy, economists are starting to warn of the dangers of displacing the middle classes and exaggerating a broader trend of rising inequality by importing more plutocrats.Ī relatively equal distribution of wealth with a substantial middle class is a feature many economists associate with advanced levels of economic development and is what distinguishes the UK or France from countries like Nigeria or Brazil. The process has turned central London into a boom town, increasingly decoupled from the wider British economy. London’s population of millionaires has boomed in the last decade, both because of the lucrative jobs on offer in the finance industry and the arrival of thousands of foreign super rich, for whom it has become a favoured playground. Now you get people from all different banks,” he says of the area where he was born and grew up during the 1970s and 1980s. “You used to get people here from all different backgrounds. Once home to a patchwork of communities including the Caribbean immigrants who founded the Notting Hill Carnival, Europe’s biggest street party, this once bohemian area now sits firmly within London’s “bonus belt” of banker neighbourhoods. LONDON (Reuters) - Art dealer Leigh Ford nurses his latte at a coffee shop table overlooking Notting Hill Gate, a busy traffic-choked street running through west London that gives its name to one of the city’s most famous neighbourhoods.
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