The Westpac-Melbourne Institute's monthly sentiment index has shown ongoing falls in consumer confidence into February, with the deterioration attributable to the economic outlook, job prospects and financial security.

The major bank's index fell 1.3 per cent from the prior month to a position of 100.8, with the index showing optimists marginally outweighed the pessimists in the future state of the economy.

During question time on Wednesday My Frydenberg quoted NAB's most recent survey, which showed improvements in business confidence over the same time frame.

"[Tuesday] there was a NAB business survey and the ... survey saw a 15 point increase in business confidence," he said.

"A 15 point increase into positive territory with the chief economist pointing to an expectation of a strong economic recovery."

The same NAB report did show a deterioration in business conditions which fell five points to an index position of three and was a result of supply shortages and labour disruptions brought on by Omicron.

Westpac chief economist Bill Evans said in his report, the erosion in confidence is likely being caused by recent inflation rises and the plausible scenario of an interest rate hike this year.

Westpac expects the Reserve Bank will begin hiking the cash rate from August, a move which RBA governor Philip Lowe conceded was "plausible".

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"The most likely explanations for these elevated pressures on finances relate to: Omicron-related disruptions to activity and earnings at the start of the year; the rising cost of living; and the prospect of rising interest rates," Mr Evans said.

"This is the most pessimistic consumers have been about the interest rate outlook since August 2011, although on that occasion, rate hikes actually failed to materialise."

The report also highlighted petrol prices in the past month had risen 8 per cent and recent inflation data showed broad price lifts in the last quarter of 2021, which is also expected to occur into the current year.

Price inflation has also been exacerbated by virus-related disruptions in supply chains and surging demand in sectors such as housing.

The Australian Bureau of Statistics most recent data showed the consumer price index to December grew annually by 3.5 per cent.

Mr Evans noted there was a sharp deterioration in personal finances compared to a year ago, suggesting respondents felt less financially stable compared to 2021.

"The sub-group detail shows a notably sharper weakening in 'finances vs a year ago' indexes for those in younger age groups, renters, retirees, and those on very low incomes," he said.

"All of these sub-groups tend to be more sensitive to increases in the cost of living, particularly for 'staples' such as food and transport."