The chasm between the richest and poorest is at a 30-year high in developed countries, dragging down world economic growth, according to a new international report.
Worsening income inequality is estimated by the Organisation for Economic Co-operation and Development (OECD) to have knocked nearly nine percentage points off growth in the U.K. between 1990 and 2010, and between six and seven percentage points off growth in the U.S.
"This long-term trend increase in income inequality has curbed economic growth significantly," said the OECD, which is made up of 34 major economies, in a report out Tuesday.
Looking ahead, the organization forecast that over a 25-year period, inequality would reduce growth by an average of 0.35 percentage points per year in OECD countries.
Worst hit between 1990 and 2010 were Mexico and New Zealand, where the OECD estimated that rising inequality had knocked more than 10 percentage points off growth.
Concern about income inequality is rising among policymakers, with Federal Reserve Chair Janet Yellen warning in October that it was near its highest level in a century in the U.S.
Globally, the issue was named as the biggest risk for 2015—trumping unemployment—in a survey by the World Economic Forum published last month.
The OECD said its findings challenged the conservative view that there is a trade-off between promoting growth and addressing inequality.
"Policies that help to limit or reverse inequality may not only make societies less unfair, but also wealthier," it said.
The organization advocated increasing access to education and healthcare, as well as cash transfers to the some of the world's poorest, to tackle the problem.
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