There’s concern a long-awaited increase to interest rates will hit Hunter businesses hard, just as they were hoping to escape the financial woes of the COVID-19 pandemic.

The Reserve Bank announced a cash rate hike to 0.35 percent on Tuesday afternoon, with the big four banks each passing on the increase in full.

Business Hunter CEO Bob Hawes says, with households keeping a closer eye on their budget, it could be bad news for business.

“For us, it’s not just the amount that it’s gone up but the message that it sends,” Mr Hawes said.

“Everyone was expecting this or anticipating it, but now it’s going to be interesting what happens with sentiment, because really at the moment, businesses can’t afford for people to put their hands in their pockets too much.

“They’re really hoping that people continue to get out there and patronise and spend.”

It’s understood, businesses have already been absorbing cost increases over the past couple of years.

Industry has also been plagued by staff shortages and inflationary pressures on the price of goods, especially as most government support measures were withdrawn after the height of the pandemic.

With more rate hikes on the horizon, Mr Hawes says it’s just another burden, and one that isn’t likely to go away anytime soon.

“That’s something that we’ve got to watch out for, because it really will have an opportunity – not necessarily just because of the amounts or the absolute amounts of changes in the interest rate – but the sentiment that it sets and the message that it sends about what’s happening in the economy,” Mr Hawes said.

“People tend to tighten up and not go out to spend and they get more conservative, and that will be a concern for businesses.”