Consumer sentiment has slipped back to its pre-election levels, with optimists now barely outnumbering pessimists.

This month the Westpac - Melbourne Institute Index of Consumer Sentiment hit its lowest level since July last year, falling to 100.2 - only just above the key 100-point level where optimists equal pessimists.

The result is 3 per cent weaker than last month, 7.5 per cent down on a year ago, and has slumped almost 10 per cent from a post-election high in September.

Westpac's chief economist Bill Evans says the biggest trigger for the decline in the overall index has been concerns about the economy's future.

"The difference between the current conditions index and the expectations index widened further and is now at its highest level since June 2000," he observed in the report.

"Specifically, the component of the index measuring consumers' expectations for the economy over the next 12 months is at its lowest level since March 2012 and the less volatile component tracking consumers' expectations over the next 5 years is at its weakest since February 2009."

Mr Evans suspects the fall in confidence has something to do with the run of bad news about car makers leaving Australia, poor results for Qantas and fears about spending cuts or tax increases in the May budget.

That has survey respondents very concerned about their jobs, with unemployment expectations at their second highest level since July 2009, and well up on last year.

Mr Evans also says that consumers' expectations about the future direction of interest rates have shifted markedly over the past six months.

"In this survey 57 per cent of respondents expect interest rates to rise over the next 12 months, with 18 per cent expecting increases of

more than 1 percentage point. That contrasts with only 6 per cent who expect some mortgage relief," he noted.

"When we last surveyed this issue in August last year only 39 per cent expected rates to rise."

Consistent with expectations of rising interest rates, the house price expectations index fell modestly to be 4.3 per cent below its peak in December, although it is still well up on this time last year.

Responses to whether now is a good time to buy a dwelling stabilised this month, but are almost 11 per cent down on September's peak.

Mr Evans says much will depend on whether recent better business confidence and conditions figures feed through into investment and employment growth.

"If these signals manifest in solid improvements in the labour market boosting consumer confidence and incomes then there will be no

need for lower rates," he concluded.