London (CNN Business) Rising inequality is threatening British democracy, a Nobel prize winning economist has warned.

Some have placed the surge in populism and the demise of established center-ground political parties at the feet of growing inequality and a greater sense of economic insecurity." The Inequality Review

Nobel laureate and Princeton professor Angus Deaton has warned that the widening gap between rich and poor is "making a mockery of democracy" and inequality in the United Kingdom could soon hit American levels.

Deaton is leading a major review into inequality in the United Kingdom, which was launched Tuesday by the Institute for Fiscal Studies, an independent economic research institute.

The five-year project will aim to define causes of inequality in Britain and propose policy solutions.

To mark the launch, the IFS published a report showing that the United Kingdom has one of the highest levels of inequality in Europe. Among the world's richest countries, only the United States is more unequal.

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