The capital is home to 46 per cent of England's ethnic minority population and its inhabitants include 37 different groups each containing more than 10,000 people born outside the UK.
Herman Ouseley, chairman of the Commission for Racial Equality, said the 1991 Census, which asked questions about ethnic origin for the first time, provided a wealth of information about the country's racial groups.
'There are large numbers of people who don't see themselves as Caribbean, African or Asian,' he said. 'They see themselves as British and expect to be treated . . . no different to anyone else.'
More than 36,000 Londoners identified themselves on the census form as 'black British' and the CRE is considering encouraging employers to introduce such a category as part of ethnic monitoring statistics.
Despite the self-identification of many people from ethnic minorities as British, the study found they still faced widespread discrimination in employment and access to housing and health services. Bangladeshis and black Africans had three times the unemployment rates of whites, while qualified people from ethnic minorities had significantly greater chances of being out of a job than similarly qualified whites.
Mr Ouseley said complaints to the CRE about job discrimination had doubled in the past 10 years and were at record levels in the first half of this year. 'In some areas there has been an improvement, but disadvantage and discrimination are still suffered by large numbers of people.'
Overcrowding is common among Bangladeshi households as a result of large family size and low levels of large and affordable accommodation. Black children and those born in Ireland had higher rates of long-term illness than any other group, while young Bangladeshi adults (aged 30-34) had twice the long-term sickness rates of whites.
The ethnic minority population of London is about 1.35 million, or 20 per cent of the total, the study from the London Research Centre says. The largest community is of Indians, (5.2 per cent), followed by black Caribbeans (4.4 per cent) and Irish (3.8 per cent).
Hackney, Lambeth and Lewisham in inner London had high percentages of residents of more than one ethnic group, as did the outer London boroughs of Ealing, Haringey and Brent.
Although nearly half of those from ethnic minorities were born in the UK, London has a higher percentage of people born abroad than in ethnic minorities elsewhere in the country. The same is true for the white population, with 87 per cent born in Britain compared to 97 per cent UK-born in other parts of the country.
'This is likely to be because London is often the place where people first arrive from abroad, and has more temporary residents, such as students and diplomats,' the study says.
Several groups, such as the Bangladeshi community, are heavily concentrated in one area (Tower Hamlets), while others, such as the Chinese, are spread widely across the capital. No single area in London has a Chinese concentration of more than 4.5 per cent, but Indians make up 67.2 per cent of the population of Northcote ward, Ealing.
Such detailed figures are essential to local policy makers, because average population statistics for an individual borough can disguise huge differences, the study says. Hounslow, for example, in west London, has an average white population of 76 per cent but is composed of seven wards where the white population is about 55 per cent and 12 wards with more than 90 per cent. Only two wards are close to the average.
London's Ethnic Minorities - One City, Many Communities; London Research Centre, 81 Black Prince Road, SE1 7SZ; pounds 25.
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