While millions are fretting whether they can afford another $1,000 on energy this year, others are still splashing out on $10,000 Hermes handbags as soaring prices leave wealthier people relatively unscathed.
A string of consumer companies, from spirits group Diageo to Birkin bag maker Hermes, have this week reported they're making money from their most expensive products and expect to continue to do so, despite a cost of living crisis that shows no signs of abating.
Sharply higher interest rates, surging inflation and a prolonged energy crisis are leading to the conclusion that the global economy is headed towards recession.
But millions of wealthier consumers are still sitting on a cushion of savings built up during the COVID-19 pandemic and keen to treat themselves after two years of restrictions.
Hermes reported a record quarterly profit margin on Friday, as sales rose sharply amid strong growth in Europe and the United States, and a rebound in China in June.
Chairman Axel Dumas said he saw no sign of a slowdown in any region, even though the company has raised prices 4% this year.
Carmaker Renault also said its turnaround strategy of focusing on selling fewer but more profitable cars was paying off, and upgraded its forecast for full-year margins. The most expensive Renault cars can cost over $100,000.
"The surprising resilience of European consumers can also be seen in the strong results of luxury brands owner, Louis Vuitton, particularly in their fashion and leather goods, such as Fendi and Christian Dior," Rebecca Chesworth, senior equities strategist at investor State Street SPDR ETFs, said.
"Consumers enjoying travel reopening have been boosting sales of wines and spirits."
Many consumers are bracing for the economy to deteriorate rapidly this winter.
In Britain, for example, a price cap on typical household energy bills is expected to jump from 1,277 pounds ($1,552)earlier this year to more than 3,500 pounds by October, while the cost of food has leapt by 10% year-on-year.
That will plunge hundreds of thousands into financial jeopardy, unable to spend on anything but the absolute basics.
Food and personal goods companies such as Nestle NESN.S and Unilever ULVR.L have been locked in hard negotiations with retailers since late last year, with supermarkets reluctant to raise prices of basic necessities and risk alienating shoppers struggling to get by.
"Not all companies can (raise prices), only companies that have pricing power that are doing relatively well - that have the dominant positions in their respective sectors - will be able to do that," BlackRock Investment Institute's global chief investment strategist Wei Li told Reuters. "Focusing on the quality players within the sector is important."
While wealthier consumers' savings are still being eroded by inflation, they currently seem focused on enjoying the freedoms that have returned with the easing of COVID-19 restrictions.
British Airways-owner IAG ICAG.L on Friday returned to profit for the first time since the pandemic, as more people flew around Europe between April and June.
"Commentary suggesting forward bookings show no sign of weakness supports the argument that pent up demand for travel still far outweighs the impact of a cost-of-living crisis," Matt Britzman, equity analyst at Hargreaves Lansdown, said.
IAG sales, on trips mostly booked out of Britain, Spain and the United States, more than quadrupled to 9.35 billion euros ($9.55 billion) in the first half of the year versus last year.
"We've had fast growth in the recovery (in travel retail) as you see travel pick up," Diageo CEO Ivan Menezes told analysts on Thursday after the Don Julio tequila and Johnnie Walker whisky maker beat full-year sales expectations.
To be sure, Menezes cautioned: "To get back to where we were, it's probably another two years, maybe a bit longer."
Europe's lenders this week also offered some positive surprises on profits, but investors are watching for signs a weaker economy, surging inflation and the war in Ukraine could hit their prospects.
Euro zone inflation rose to another record high in July and its peak could still be months away, keeping pressure on the European Central Bank to opt for another big interest rate increase in September.
For now, however, French bank BNP Paribas BNPP.PA reported better than expected quarterly profit on Friday, after bad loan provisions dipped and business remained buoyant in both investment and retail banking.
(Reporting by Richa Naidu and Lucy Raitano in London, Mimosa Spencer in ParisAdditional reporting by Kate HoltonEditing by Mark Potter)
The head of the Air Canada pilots union says she'll step down if members opt not to approve a tentative deal with the airline, raising the stakes as aviators mull whether to accept hefty salary gains or drive an even harder bargain.
Toronto police say they are searching for a suspect who allegedly shot and killed his brother in an argument at a Scarborough housing complex late Saturday night.
At least two students at Gettysburg College in Pennsylvania have been suspended from the swim team after a report that a racial slur was scratched onto a student's body, officials said.
Comedian John Mulaney and actor Olivia Munn now have a second child, a daughter named Mei June Mulaney.
Kate, the Princess of Wales, made her first public appearance Sunday since she announced she had completed chemotherapy and would return to some public duties.
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An Edmonton man says he was in the wrong place at the wrong time when he was injured by members of the Edmonton Police Service last year.
North Carolina Lt. Gov. Mark Robinson avoided directly weighing in during a gubernatorial campaign event Saturday on a CNN report outlining evidence that he made disturbing posts on a pornography website's message board more than a decade ago.
Israeli Prime Minister Benjamin Netanyahu is considering a plan to force all Palestinian civilians out of northern Gaza, including Gaza City, in order to lay siege to Hamas and force the release of hostages.
Ontario's police watchdog has decided there are no grounds to believe Sudbury police committed a crime during a difficult arrest in May where the suspect's neck was broken.
The City of Calgary ended water restrictions for the city at a Sunday morning update.
Toronto police say they are searching for a suspect who allegedly shot and killed his brother in an argument at a Scarborough housing complex late Saturday night.
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Pasquale Monaco says he’s debating whether to keep renting out the two-bedroom basement apartment of the Montreal building he owns after it was flooded — again — in August, when the remnants of tropical storm Debby sent four feet of water rushing into the space.
Infectious disease physician Dr. Isaac Bogoch says whooping cough is most risky for unvaccinated infants, children and older people.
North Carolina Lt. Gov. Mark Robinson avoided directly weighing in during a gubernatorial campaign event Saturday on a CNN report outlining evidence that he made disturbing posts on a pornography website's message board more than a decade ago.
An explosion in a coal mine in eastern Iran killed at least 33 workers and injured 17 others, officials said Sunday, marking one of the worst mining disasters in the country's history as others remained missing hours after the blast.
More than a year after the Titan submersible imploded, killing all five voyagers on board, the story of the ill-fated expedition to the Titanic has taken the form of a modern-day Greek tragedy overflowing with mortal pride and heedlessness.
In less than two months, Americans will go to the polls to choose their next president. But the process that translates those millions of votes into one seat in the Oval Office is much more complicated than a straight tally.
Donald Trump has long pledged to deport millions of people, but he's bringing more specifics to his current bid for the White House: invoking wartime powers, relying on like-minded governors and using the military.
At least two students at Gettysburg College in Pennsylvania have been suspended from the swim team after a report that a racial slur was scratched onto a student's body, officials said.
Prime Minister Justin Trudeau is set to be in New York this week for the 78th meeting of the United Nations General Assembly and the Summit of the Future amid increasing geopolitical instability around the world.
A $2.14-billion federal loan for an Ottawa-based satellite operator has Canadian politicians arguing about whether American billionaire Elon Musk poses a national security risk.
Procurement Minister and newly appointed Quebec lieutenant Jean-Yves Duclos is warning the NDP that the dental care program it helped put into place will be in jeopardy if it pulls its support from the governing Liberals.
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If something looks too good to be true, it might be. That's the message from Saskatchewan horticulturists after customers have come into their stores hoping to buy purple apple trees this month.
The owner of the shuttered Three Mile Island nuclear power plant said Friday that it plans to restart the reactor under a 20-year agreement that calls for tech giant Microsoft to buy the power to supply its data centers with carbon-free energy.
Lebanese authorities on Thursday banned walkie-talkies and pagers from being taken on flights from Beirut airport, the National News Agency reported, after thousands of such devices exploded during a deadly attack on Hezbollah this week.
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Tim Burton's legacy sequel to the 1988 horror comedy topped the North American box office charts for a third
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The Winnipeg Blue Bombers have a nickname for the opposition’s end zone. They refer to it as the “chicken box.â€
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Kiefer Sherwood spent several nights last spring chasing Quinn Hughes around the ice and generally pestering the Vancouver Canucks.
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Chechen leader Ramzan Kadyrov has accused Tesla CEO Elon Musk of 'remotely disabling' his Cybertruck, which had been sent to the frontline of Russia's war in Ukraine.
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An anonymous business owner paid off the mortgage for a New Brunswick not-for-profit.
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A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
Paleontologists from the Royal B.C. Museum have uncovered "a trove of extraordinary fossils" high in the mountains of northern B.C., the museum announced Thursday.
The search for a missing ancient 28-year-old chocolate donkey ended with a tragic discovery Wednesday.
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Toronto police say they are searching for a suspect who allegedly shot and killed his brother in an argument at a Scarborough housing complex late Saturday night.
The explosive devices unit (EDU) is investigating after a suspicious package was found outside Union Station on Sunday afternoon.
Toronto police have arrested three people and they are looking for two others in connection with an alleged fraud that saw a man and his daughter bilked out of more than $18,000.
The City of Calgary ended water restrictions for the city at a Sunday morning update.
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Thousands participated in the 17th annual Canada Army Run Sunday in the capital's downtown.
Ottawa Fire Services says no injuries were reported after a fire broke out in a bedroom in a townhome in Beacon Hill South early Sunday morning.
Provincial police (SQ) are looking for 29-year-old Kelsey Watt, who went missing in Hemmingford, Que.
Mark and Heidi Strohl's love story has stood the test of time. The couple, who met at Herzlia High School over 50 years ago, have been together since their teenage years.
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The 75-year-old building, formerly the Waskesiu Chamber of Commerce building, was relocated to the Parks Canada compound on the edge of the townsite.
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Wage increases, new paid holidays and a big signing bonus are part of the new contract for CAMI employees in Ingersoll, Ont.
The most popular hockey podcasters on the planet brought some major attention to the Forest City this weekend with the annual Chiclets Cup.
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A year after being recognized as one of 19 ‘Bee Campuses’ by Bee City Canada, Georgian College continues to promote the importance of bees to agriculture, the economy and education.
One person is dead after a crash in Caledon on Sunday.
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The St. Clair College Saints were in Oshawa over the weekend as they faced Durham College.
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Despite the heavy rain, plenty of muscle turned up for United Way’s annual Pull the Bus fundraiser in Lethbridge Friday.
Lethbridge County has rescinded its fire restriction as a result of the recent cool, wet weathr.
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Newfoundland and Labrador's chief medical officer is monitoring the rise of whooping cough infections across the province as cases of the highly contagious disease continue to grow across Canada.
A 16-year-old biennial event aimed at fostering business in the country's eastern Arctic and northern regions has been cancelled indefinitely as a dispute unfolds between Inuit in Canada and a Labrador group claiming to share their heritage.
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