They say it's Europe's richest inner city. Try telling them that in Hackney

PINK CHAMPAGNE, you might have thought, was a bit decadent for a working lunch. But then this is the City of London, which yesterday learnt that it heads the European wealth league. Yesterday, inner London, of which the City forms a part, knocked the previous leader, Hamburg, into second place by a considerable margin.

The rose fizz was pounds 39.50 a bottle, with smoked salmon sandwiches at pounds 2.70 a round. A special occasion? I asked the round-faced youth in his plain blue Italian suit in the wine bar near the new multi-million pound Broadgate Centre which houses financial wealth-creators like Warburg, UBS and Lehman Brothers.

"No," he said, "some days we have the pink and some days the brut."

But this is a tale of two lunches. Five minutes up the road Helen Darcy, a solitary pensioner, was finishing off her midday meal in the Kingsland cafe in the borough of Hackney. Egg and chips was pounds 1.80, but today she had splashed out and had bacon too, which brought it to pounds 2.45, plus 30p for a mug of tea.

She eats out there twice a week. It is cheaper than eating in for some meals, she said. It helps her eke out the pounds 50 a fortnight she draws for food and gas.

Hackney is part of the outer London area which earns only one-third of what inner London does, according to the European Union's statistical service, Eurostat.

Once you had to go to the Third World to find wealth and poverty sitting in such cheek- by-jowl proximity. And while it is true that the contrasts might not be as severe as in somewhere like Ethiopia, where the Addis Ababa Hilton stands surrounded by mud huts and shanty homes, the contrast in London today is grim and striking.

In modern Britain, the gap between rich and poor continues to grow, it seems. The statistics give a hint of it. In the City, the average gross wage, according to the National Statistics Office, is pounds 749.50 a week, compared with pounds 565.30 in Hackney, and just pounds 374.10 in the borough of Lewisham.

But these are only averages. The City wine bar is surrounded by a world of smart restaurants with private rooms, Dvorak lunchtime concerts, and jewellers shops so swish that they don't display the price in the window (pounds 390 for a nice set of plain white gold cuff-links, when you ask).

The Hackney cafe, less than one mile away, is in a different world. It stands in a parade of shops which include a second-hand clothes store, boarded-up buildings plastered with fly posters, and a bailiff's office whose security doors and anonymous name plate are betrayed by a bolder, exasperated notice in the neighbouring shop which announces: "Please note we are not Drakes Bailiffs. They are next door."

Bags of rubbish and old bicycle wheels litter the street. Across the road are the offices of the Family Welfare Association, a charity which offers grants to the desperately poor. Two shops down, the Citizens' Advice Bureau carries in its window a poster from the Child Poverty Action Group setting out a long list of currently available state benefits. The newsagents' noticeboards are full of advertisements asking for "out workers" to do "sewing, clerical, electrical and packing in your own home". Childminders advertise vacancies. In the large Oxfam shop in the former Dalston Snooker Centre, people form long queues at the till to buy the old clothes.

Not far away, a solicitors' office carries by its door a laminated sheet proclaiming two hours' free advice on domestic violence for those on income support, family credit, disability working allowance or those with an income of less than pounds 80 a week. Representation at police stations is also available, it says.

Did the contrast between these two worlds hold any concerns for the brokers and dealers in the champagne bar? "I'm not saying anything," said the youth in the Italian suit, "And I'm not giving my name in case you take the piss."

It revealed, I thought, a conscience of sorts, however suppressed. Around him others made anodyne statements about "market forces".

"It's the way life is, I'm afraid," said one buyer and seller of other people's efforts.

"It's the way life is," said Mrs Darcy, as she finished her chips. "But I don't like it.

"It makes me feel small to think they earn in one week more than I have in all my savings in the bank. It makes you wonder."

Indeed it does.

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<b>Kathryn Williams</b>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
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