RBA rate hike hit consumer confidence, Westpac survey finds

The news: The Reserve Bank's move to lift interest rates has taken a toll on consumer confidence, a new survey shows. The Westpac Melbourne Institute Consumer Sentiment Index fell further into "deeply pessimistic" territory despite lifting briefly last month.

The numbers: The index was down 2.6% to 79.9 index points in November, only slightly above September's 79.7 after lifting to 82 index points last month. RBA's rate decision last week reduced consumer confidence by 6%, while 73% of participants expected further hikes ahead, Westpac economists said.

The context: Despite the drop in confidence, spending has remained strong, driven by non-discretionary spending on transport, health services and food, ABS figures showed earlier this month. Westpac senior economist Matthew Hassan said November's confidence print was a bad omen for Christmas spending, with 40% expecting to spend less on Christmas this year. The response was in line with last year's survey, which was already the most downbeat since the question was added in 2009.

What they said: “Previous months had been showing some tentative signs that sentiment might was starting to lift out of the deep pessimism that has prevailed since the middle of last year," Hassan said in a statement.