The Bank of England’s Financial Policy Committee (FPC) has warned that the growth of new lending to already indebted firms, through leveraged-loans, has parallels to the subprime mortgage boom which ended with the global financial crisis in 2008.

Minutes from the FPC’s latest meeting also reveal warnings over the rise in loans with weaker covenants attached, and that EU authorities must ensure clearing houses can continue to function in the event of a no-deal Brexit: “There had been considerable progress in the UK to address these risks, but only limited progress in the EU,” the FPC asserted.

The US is leading the $1.3tn global market in so-called leveraged loans, with the UK not far behind. A record £38 billion of such loans were issued in Britain last year by shadow banks alone, with a further £30 billion issued so far this year.

The Bank’s deputy governor, Sir John Sutcliffe,  says the figures suggest to a “weakening in underwriting standards. “ven in the broadly benign credit environment of the last two years we have seen the highest volume of defaulters since 2009.”