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Inequality Street: UK most unequal country in EU, worse than US

Britain has been labeled the “European capital of inequality” after a report found it is the most unequal country in the EU, and worse than even the United States.

The Dublin-based European Foundation for the Improvement of Living and Working Conditions (Eurofound) analyzed wages across the EU.

It found that the UK has the highest Gini coefficient of any EU member state, and eclipses that of the US. The coefficient is a widely used measure of income distribution within a nation, and is often used to calculate inequality.

According to analysts at Eurofound, Britain has a Gini coefficient of 0.404, while the US is at 0.4.

Portugal and Latvia followed the UK with Gini coefficients of 0.358 and 0.357, respectively. The average Gini index for the EU as a whole in 2011 was 0.346.

Eurofound’s study, titled Recent Developments in the Distribution of Wages in Europe, looked at data from 2004 to 2011, the period before and after the onset of the Great Recession.

The report, which was published last week, says: “The evolution of inequality in the EU as a whole seems to have been significantly affected by the economic crisis of 2008 [onward].”

Between 2004 and 2008, there was a clear reduction in EU wage inequality, reflected in a fall in the overall Gini index from 0.368 to 0.336 (a 10 percent decrease in four years). This fall came to a halt in 2008, and the trend started to slowly reverse, growing to 0.346,” it said.

Economist Michael Burke said Eurofound’s study proved that claims by Conservative Prime Minister David Cameron that Britain’s economy was recovering from the recession were false.