Why are people so convinced inequality is rising in Britain, even though the figures say it isn’t?

This is one of the great political paradoxes of our times, the point where what most people would describe as common sense parts company rather confusingly with statistics. The divide between haves and the have-nots certainly feels as if it’s got wider through the austerity years, as rising numbers queue for food banks while at the other end of the spectrum FTSE chief executive pay has risen to 145 times that of its average employee. The Brexit referendum exposed deep divisions between people still relatively content with their lot and those who, for whatever reason, felt left behind. Who really feels, deep down, as if society has got fairer over the last decade?

Yet as the government keeps pointing out, income inequality has actually fallen since 2010, with middle- and top-earning households’ income shrinking. Something is ostensibly going right but it feels as if everything is going wrong, and it’s this paradox that the US-based economist Sir Angus Deaton aims to unravel as he begins a lengthy inquiry into inequality in Britain on behalf of the Institute for Fiscal Studies thinktank.

What’s interesting about this study is that it goes way beyond money, digging down into what the IFS’s introductory report calls “the culmination of myriad forms of privilege and disadvantage”. Deaton told BBC Radio 4’s Today programme that he’s particularly interested in inequalities of health – encompassing not just the eternal tragedy that poor people on average die younger than rich ones, but also the question of what kills them, with so-called “deaths of despair” from causes such as suicide, drug overdoses and alcohol rising sharply in the US – plus inequalities of educational opportunity and political representation. In other words it’s not just about poverty but about everything else that comes with it; feelings of hopelessness and of being trapped, the fear of your kids missing out on opportunities that middle-class families take for granted, a sense of not being heard by the powers that be.

But his remit goes far wider even than that. The report makes clear this is a wildly ambitious attempt to unravel the tangled knot of inequality in all its forms, from geography – or the feeling that good things might be happening in the capital but towns beyond its orbit don’t get the benefit – to gender and ethnicity. It’s looking at how the increasingly bitter divisions between young and old, rich and poor, provinces and big city overlap or compete with each other, driving a much more pervasive sense of unfairness. None of this is properly captured by the Gini coefficient, an economic measure of equality that has remained roughly stable in Britain since the 1990s, but all of it makes a difference to people’s lives and all of it potentially creates grievances.

If the IFS is right and those are about more than just money, the clear implication is that tackling individual poverty or cracking down on individual excess wealth may not by themselves solve the problem. The answers will also be about how and where public money is spent, what happens to social mobility, and perhaps too about what sort of people are seen to be taking the decisions.

Nigel Farage is cruising to victory in next week’s European elections not just because of Brexit but because of his uncanny ability to tune into the frequency of people who feel looked down upon by mainstream parties, and the blunt truth is that many of those voters are not actually struggling financially. They just feel things are slipping away from them, culturally if not economically; that people who don’t listen to their views or defend their interests are now in charge, which raises difficult questions about whether some perceived injustices are more unjust than others.

The IFS skirts carefully around the political implications of all this, understandably enough given it derives its credibility from its strict neutrality. It has set itself a daunting enough task in just unpicking what’s actually going on, and trying to produce workable solutions. But in the end, the politics of grievance can only be defeated by a better politics, one that recognises both economic and emotional realities in people’s lives. Reading the report, it’s hard to escape the nagging feeling that something this important shouldn’t have been left to a thinktank to do properly. I wish the IFS all the luck in the world with this inquiry, because I suspect it’s going to need it.

• Gaby Hinsliff is a Guardian columnist