The resilience of luxury brands

Recent announcements concerning the success of retail's most luxurious brands, including PPR, owner of Gucci, Alexander McQueen and Stella McCartney, Burberry and Rolls Royce suggests the top end of the market continues to be extremely resilient despite the economic backdrop. But is there an even more interesting story to tell, and can we conclude from indicators such as this that the wealthy are getting wealthier whilst the rest of us seem to start counting down the day to the next pay day only a few days after the our bank accounts temporarily dip into the black? 

It's obviously not the most scientific approach to answering this question but the point really is that, despite recent figures indicating  that inflation has subsided slightly, mostly as a result of VAT not being included in the comparative figure, price inflation is still far outstripping wage inflation as household demand waivers due to uncertainly over employment and wage prospects. 

According to Simon Wells at HSBC household consumption in Q3 2011 was only 1% higher than the trough in mid 2009. This suppressed demand is probably not being felt by the mega rich, but those on the bottom rungs of the income ladder. Understandably this is being translated into a backlash against bankers bonuses, boardroom incest and Conservative Party policy on austerity. 

No doubt the Lib Dems will be lobbying pretty hard internally for some kind of positive intervention for the lowest earners in next month's Budget, but given the recent Moody statement on the prospects for Britain's credit rating this doesn't seem likely for now.