Austin Hughes

Yeah.

Good morning, Susan.

Often when we talk about the economy, we speak of

the consumer or the economy, as though conditions were entirely the same right across every business and every household.

And that's something you learn in basic economics, this idea of a representative agent.

Now, this idea of the K economy is something a journalist actually mentioned to me about economic conditions.

He said, we may all be in the same storm at the moment, but we're not all in the same boat.

And the K-shaped economy is the idea that

those who are towards the top of the income and asset wealth profile tend to be doing better than those at the lower end.

And if you think about it, the top element of the K is getting increasing and spending and earning more, and the bottom end is going lower.

Now, that would be particularly true of the US economy, where you have stellar sort of income and wealth growth at the top,

and very limited safety in terms of social welfare supports at the bottom end.

So there is that element of a divided economy in the US and a fractured society.

Ireland is a lot more equal probably than most other economies, but you do have something of the same trend emerging where those who are doing well are probably doing a bit better

than those who are struggling because, as you say, of the cost of living crisis.

And certainly in our consumer sentiment survey, we're seeing that those who tend to be on lower incomes are saying that they will be spending less at Christmas, and those fortunate enough to be in the top 10% are saying that they will probably have more to spend this Christmas.

So it's the idea of a divided economy and two parts of the economy moving in different directions.

Yeah, well, it does mean, as I say, of this divided economy.

And if you look at the Irish statistics in that regard, there's the Central Statistics Office does a study of income and living conditions.

And they say that in 2023, they're the latest data we have, that the lowest 10% of households had a weekly income of €309.