Living standards at risk without hard inflation medicine, Treasurer Jim Chalmers warns - expected to hit 7.75pc by the end of the year

Federal Treasurer Jim Chalmers has warned inflation will peak at 7.75 percent by the end of the year while downgrading economic growth in a special statement to federal parliament delivered today.

Acknowledging the pain being felt by households from higher daily prices and mortgage repayments, Dr Chalmers said living standards could be compromised without hard medicine in the form of interest rate rises to tame inflation. 

Analysis from ABC's Peter Ryan.