The effectiveness of monetary policy in the Eurozone and in other advanced economies is facing a new challenge. It is the reappearance of the K-shaped consumption pattern—a trend that, although not new, has consolidated over recent quarters—making it harder for authorities to control prices and inflation expectations, according to the Economic and Sector Outlook Report 2026 prepared by Mapfre Economics.

What is “K-shaped” consumption?

Our research department describes it as a “divergent or unequal pattern within an economy, where different income groups experience markedly different growth rates.”

On the upper arm of the “K” are higher-income households and large companies, which experience solid growth, expanding wealth, and a vibrant economic environment, explains Mapfre Economics.

On the lower arm, meanwhile, are lower-income individuals and small businesses, which “continue to face hardship, stagnation, or economic decline,” the report adds. It also anticipates that this trend will persist in the future and will help interpret consumption in the coming quarters.

“Higher-income households continued spending without difficulty, while middle- and lower-income households lost purchasing capacity, pressured by stagnant real wages and tighter access to credit. The result is aggregate spending that remains stable, but increasingly concentrated among those who react least to changes in interest rates,” summarize the report’s authors.

Impact on central banks

In light of this scenario, central banks face a challenge, as the consolidation of this “K-shaped” consumption is affecting the transmission of monetary policy—the main mechanism authorities have to try to control prices and lay the foundations for economic growth.

“Monetary policy loses effectiveness because it acts on an increasingly narrow consumer base, as the lower part of the distribution becomes trapped in a rigid dynamic,” explains Mapfre Economics. A large majority is trapped in a vulnerable situation, while a minority increasingly sustains demand.

“This asymmetry not only reflects greater inequality, but also affects the transmission of economic policy, the formation of expectations, and, in the medium term, the sustainability of growth,” warns our research department.

Beyond central banks, the new normal imposed by K-shaped consumption also poses a challenge for governments. Economic policy in the Eurozone and other developed regions faces a double challenge, the report notes: on the one hand, “maintaining disinflation” without causing unnecessary harm to the most vulnerable consumers; on the other, “strengthening productive investment” without fueling a surge in prices.