Black and ethnic minority people faced ‘entrenched’ racial inequality in Britain which could lead to simmering tensions, a watchdog has warned.

An ‘alarming picture’ of racial inequality was identified in many strands of modern life including education, employment, housing, pay, health and criminal justice, it said.

A sweeping review by the Equality and Human Rights Commission warned that failing to tackle the problem would deepen the schisms in society.

Ethnic minorities are still hugely under-represented in positions of power - such as judges and police chiefs

Commission chairman David Isaac said the report ‘underlines just how entrenched and far-reaching race inequality remains’.

He said: ‘We must redouble our efforts to tackle race inequality urgently or risk the divisions in our society growing and racial tensions increasing.

‘If you are black or an ethnic minority in modern Britain, it can often still feel like you're living in a different world, never mind being part of a one nation society.’

The commission, which carried out an analysis of existing evidence, said black workers with degrees earn 23.1 per cent less on average than their white counterparts.

It also said black Britons were more than three times more likely to be a victim of murder. said that black people in England were more than three times more likely to be a victim of homicide than those who are white.

It also found that unemployment rates were ‘significantly higher’ for ethnic minorities while they were more likely to live in poverty than white people.

And ethnic minorities were still hugely under-represented in positions of power - such as judges and police chiefs.

The report noted progress in some areas, citing an increase in the number of ethnic minority MPs. Above, London Mayor Sadiq Khan

The commission said there has been progress in some areas, citing an increase in the number of ethnic minority MPs and a rise in the proportion with a degree-level qualification across all ethnic groups.

Mr Isaac urged the Government to introduce a comprehensive race equality strategy.

He said: ‘We need to build a fair society in which our origins do not determine our destinies.’