Inequality in the UK on the decline, IFS finds

Higher income and a lower unemployment rate have aided in closing the gap on inequality across the UK, but some regions are still suffering, a new study finds.

According to the Institute for Fiscal Studies, the Midlands area was suffering the most from the wage gap, with salaries there between 6% and 9% below the national average.

Average income in the North and Wales today has only just caught up to what a South Eastern resident or a Londoner could expect in the late 1990's, IFS said in its report entitled 'Living Standards, Poverty and Equality: 2017'.

The independent research, funded by the Joseph Rowntree Foundation was based predominately on official figures gathered from 2015-16 which predated the slowdown in household income as a result of Brexit – which has seen inflation percentages beat out wage growth for the first time since 2014.

Campbell Robb, from the Joseph Rowntree Foundation said of the report, "These alarming figures highlight how far behind some parts of the UK have fallen, with millions of people seeing their incomes stagnate or even worse decline."

London, while remaining the most unequal part of the country, had seen income inequality move in the right direction. Since the end of the last decade, the lowest-income households had seen their earnings jump by more than 10% even as the top earners had seen their wages fall by more than 10%.

The capital also seemed to be trending towards further growth in employment with a 5.2% increase over the course of the study, as opposed to just a 1.5 percentage point increase in hiring across the rest of the UK.

Yet the South East of England was the highest-income region, beating out the capital, with the study noting that on average residents of the area where earning an income that was 25% higher than those in the West Midlands.

However, the study also noted that if one took into account housing costs then average incomes in London were in fact slightly below the British average, instead of 10% above.

Absolute poverty had barely changed since the Global Financial Crisis the think-tank also found, describing it as "historically unusual".

A spokesman for the Treasury said, "We are building an economy that works for everyone by sharing prosperity and opportunity throughout the UK so nobody is held back because of where they come from."

Mr Robb stressed the point that with people working now until record ages, the government must make a priority of developing a plan "that will deliver more and better jobs and higher living standards that people desperately need."