Tower Hamlets has the biggest pay inequality in London, according to a new report.

The London Poverty profile also claimed that the gap between pay for the top and bottom 20% of earners in Tower Hamlets was still rising.

It said: “Pay inequality varies by London borough, although this is not marked by straightforward trends between inner and outer London. Camden has the lowest pay ratio between the 80th and 20th income percentiles (so is the least unequal), while Tower Hamlets has the highest.

“Some of these ratios are very high and rising – in Tower Hamlets, the ratio of high to low pay is now more than in 2009.

“The recovery in financial services, which is where many of the high paid Tower Hamlets jobs are, has raised the pay of high earners much more than the average.”

Also online: Child poverty worst in Tower Hamlets

The report also stated that although unemployment was gradually moving out of inner London to suburbs, inner east London still had a large proportion of people out of work.

It said: “In our first report in 2009 we noted that the pattern of poverty in London had shifted in the previous decade, moving away from the inner core towards the outer suburbs. This has continued in the years since, and changes as a result of welfare reform feed into it.

“Boroughs such as Brent and Ealing feature more prominently in this report than they did in 2008... but places such as Hackney, Newham and Tower Hamlets are still frequently found at the wrong end of the rankings for indicators on benefit receipt and worklessness.”

The report also stated 27% of Londoners live in poverty after housing costs are taken into account, compared with 20% in the rest of England. The cost of housing is the main factor explaining London’s higher poverty rate.