This paper studies the effect of monetary policy on inflation along the income distribution in several euro area countries. It shows that monetary policy has differential effects and identifies two channels which point in opposite directions. On the one hand, different consumption shares imply that inflation by high-income households responds less to monetary policy. On the other hand, the paper provides novel evidence that there are substantial differences in shopping behaviour and its reaction to monetary policy, which imply that inflation by high-income households responds more to monetary policy.Monetary policy has distributional effects. After all, a change in interest rates affects agents dif￾ferently depending on their interest rate exposure. To give one example, savers and borrowers are exposed in the opposite way, and this is precisely the intention of a monetary policy action. Distri￾butional effects are furthermore triggered because monetary policy affects income and wealth dif￾ferently across agents. Coibion, Gorodnichenko, Kueng, and Silvia (2017) find that contractionary monetary policy leads to a persistent increase in the inequality in labour earnings and total income, as well as in consumption and total expenditure. This, in turn, affects monetary policy transmission.