As the nation stopped to kick home Shocking in the Melbourne Cup, analysts kept one eye on computer monitors for the announcement, which was made just before post time.

Economists widely forecast a rise of a .25 percentage points and the bank chiefs didn’t disappoint.

At its meeting yesterday, the reserve bank board decided to raise the official cash rate by 25 basis points, to 3.5 per cent.

The new rate becomes effective from today.

Ironically, last Melbourne Cup day, the reserve bank slashed the cash rate by .75 of a percentage point.

But the economic outlook is vastly different this year.

Julian Morgan has owned ColorTile in Port Macquarie for the past six years.

He said consumer confidence would be hit because of yesterday’s rise.

“Historically, we experience a slow down in the market immediately after the announcement of a rate rise,” the business owner said.

“And then it takes about three months for people to adjust to the rise before they start to spend properly again.”

Mr Morgan sees the rise as just another part of the economic cycle.

“The last three years have been tough in retail,” the 22-year industry-veteran said.

“But during this time we have looked internally to become more efficient and to seek new ways of attracting business.”

The father-of-two said there had been a recovery in business on the back of the government stimulus package and the First Home Owner Grant Scheme during July, August and September.

But he was not optimistic in his outlook for the next few months.

“October was a struggle and, with a double whammy of school holidays and today’s rate rise, I don’t have high expectations for November.

“It could be very tough as we head towards December.”

But Mr Morgan said his business was well positioned to ride out any storm following the rise or predicted future rises.

“We have tightened things up and are more aggressive,” the 47-year-old said.

“We are in good shape.”

ColorTile is a tile and bathroom design centre and retail outlet.

The Port Macquarie company employs seven staff at its Lake Rd premises.