Ben Chu: Inequality is falling. Quick, let's stop that

Outlook In most recessions the rich pull away from the poor. Not this one though. Figures released by the Department for Work and Pensions yesterday confirm that income inequality in the UK has fallen since the financial crisis.

This is because wages for the majority of people (except company bosses) have been outstripped by inflation, while benefits have been rising in line with the cost of living. But the Institute for Fiscal Studies points out that George Osborne is likely to reverse that trend by the end of the Parliament through his plan to hold benefit rises below the rate of inflation just as average wages are forecast to start growing in real terms.

In opposition the Tories pledged to reduce inequality as part of their "compassionate Conservative" rebranding exercise. Normally governments break their promises by accident or omission. This one seems to be doing it on purpose.

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