The row over Thomas Piketty's bestselling book Capital in the 21st Century has taken a new twist after the journalist who said he had uncovered mistakes in the French economist's work was accused of making "serious errors" of his own.
Analysis by the economic consultant Howard Reed published on the Guardian's datablog supported Piketty's view that inequality of wealth has been rising in recent years and dismissed the attack on some of the book's findings by the Financial Times journalist Chris Giles.
Rightwing opponents of Piketty seized on the FT critique after Giles accused the Paris-based economist of cherry-picking data and pointed to unexplained entries on spreadsheets and big discrepancies between Piketty's estimates of wealth trends in Britain and the picture portrayed by official figures.
Reed said the discrepancies were caused by Piketty making allowances for the different estimates of wealth in six data sources used to calculate the trend since the early 19th century. Giles, he added, had failed to adjust for these "discontinuities" in the data.
"Taken as a whole, these discontinuities imply that the estimate of the top 10% share of wealth is 22.5 percentage points lower by 2010 than it would have been if the wealth statistics had been collected on a consistent basis after 1974, as they were before 1974. As I show, the main difference between the Piketty time series for UK inequality and the Giles time series for UK inequality is that Piketty corrects his data series to allow for this 23 percentage point drop (caused by changes in the methodology used to measure the wealth distribution) whereas Giles does not."
Reed said in his blog: "To believe that the Giles series represents an accurate picture of the evolution of wealth inequality in the UK over the last 50 years, one would have to believe that the wealth share of the top 10% really did fall by 12 percentage points during the 1970s, and by another 11 percentage points between 2005 and 2006. Does anyone really believe this? Of course not."
The FT has been surprised by the furore caused by its attack on Piketty and is now keen to take the heat out of the row. Giles declined to respond to Reed's analysis.
Reed, however, acknowledged that Giles had "uncovered some errors and inconsistencies which Piketty will hopefully address in future work". This showed the importance of checking results, he said, especially when they involved spreadsheets, where it was easy to make errors.
"However, Giles then goes on to make a very serious error of his own in handling the UK data: he treats changes in the way wealth inequality is measured over the decades as if they were real changes in the underlying distribution of wealth. This error leads him to the misleading conclusion that wealth inequality fell in the UK between 1980 and 2010, whereas in fact it has increased (although not by quite as much as Piketty's published results would suggest)."
Interest in both Piketty and inequality shows little sign of waning. Both Mark Carney, the governor of the Bank of England, and Christine Lagarde, the managing director of the International Monetary Fund, cited the need to narrow the gap between rich and poor in speeches this week.
Andy Haldane, the Bank's executive director for financial stability, cited Capital in the 21st Century directly in a speech released on Thursday. The bank official said: "Enough has already been said and written about a book bought by many, read by few and understood by even fewer (Piketty (2014). I am guilty on all three charges.
"I suspect never, in the field of human endeavour, has so simple a line chart done so much to fuel the debate among so many, not just in the salons of Paris but in the Starbucks of London and New York.
"Suffice to say, the inequality issue seems unlikely to be a French fashion. It is a global public policy trend and a rising one."
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