IN HIS improbable blockbuster, “Capital in the Twenty-First Century”, the French economist Thomas Piketty argues that inequality is rising inexorably across the West. Recent British history hints at a wrinkle in that smooth picture. Figures released by the Office for National Statistics suggest that, adjusting for inflation, the middle of Britain’s wealth distribution was squeezed by the recession that followed the financial crisis. But both the rich and the poor came through with roughly the same level of assets that they had before the crisis (see chart).
The poor had little wealth to start with, of course, and it was mostly in possessions such as cars and sofas, which are hardly susceptible to financial chaos. Housing wealth, which is fairly widely spread among the rich and middle classes, was hit harder. Real house prices fell by 12% between 2007 and 2011, though they are now surging again.
