The Reserve Bank’s November interest rate hike has put more pressure on household budgets and consumers are becoming increasingly concerned about the prospects of another one. A report from Westpac on Tuesday revealed consumer sentiment had slipped in early November to return to deeply pessimistic levels. The RBA’s decision to increase the cash rate 25 basis points to 4.35 per cent last week knocked 6 per cent off the confidence index during the survey week. “Consumers remain wary of the potential for more rises,” Westpac senior economist Matthew Hassan said. “The weak November sentiment print is an ominous sign heading into the Christmas high season. Pessimism is having a major bearing on spending attitudes.” Among those surveyed after the RBA decision, 73 per cent expect mortgage interest rates to move even higher over the next 12 months. That compares to 63 per cent last month and 48 per cent in September. Only 4 per cent of consumers expect rates to be cut over the next year, down from 15 per cent in September. Mr Hassan said the labour market remained a relative source of support for consumers. “The November consumer sentiment survey highlights the weak and uneven conditions across Australia’s consumer sector,” he said. “How this plays out for wider domestic demand in the context of strong population growth is something the board will need to consider as it acts to ensure inflation returns to target.” Economists have not discounted another cash rate increase when the RBA next meets on December 5 but many expect a February increase is more likely, should one be needed. Meanwhile, the latest weekly ANZ-Roy Morgan data showed consumer confidence decreased last week to its lowest level in four months following November’s rate hike. “The fall in confidence was driven by those most exposed to the rate hike, those paying off their homes and those who own their homes outright,” ANZ senior economist Adelaide Timbrell said. A National Australia Bank survey also revealed business conditions remained strong as confidence edged lower. “Overall, the survey continues to support an assessment that the economy has remained resilient heading towards the end of the calendar year despite the many headwinds weighing on business confidence,” NAB chief economist Alan Oster said. “High rates of capacity utilisation and both input and output costs pressures point to ongoing inflation pressures — though they appear to have passed the peak.” CreditorWatch chief economist Anneke Thompson said the Westpac and NAB surveys supported its latest prediction for business failure rates. While it remains low, Ms Thompson expects the failure rate to quickly increase over the next 12 months to around 5.8 per cent.