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Income inequality in the UK has been increasing for about 30 years, and as a result has led to a loss of about £134.5 billion in the country's GDP. This is a growing problem because it comes to show that it has a significant negative impact on economic growth. One of the reasons behind this inequality is due to the fact that there is a loss of educational opportunities for people who are underprivileged and does not have access to a better education. According to the OECD, the wage gap between 34 countries that are a part of the organization is at it's highest, with the wealthiest 10% of people making almost 10 times the amount of the poorest. Economists say that to fight this rise in inequality, they suggest getting rid of tax breaks that only really benefit the wealthy, and have higher top rates of income tax.
Income inequality is a problem and will always be a big problem if we don't address it. If we can reduce the income inequality gap, there will be more money spent in the economy and it will increase GDP. The wealthy 10% of the economy may not always invest back in the economy and spend more. However, lower income people will spend more and invest in the economy because they have to.
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