Britain cannot afford to borrow more without jeopardising the country’s financial stability, a senior Bank of England official has warned.

Richard Sharp said the Government had already borrowed an extra £1 trillion since the 2008 financial crisis.

Borrowing more could put the country at risk of suffering from a collapse similar to that experienced by Venezuela, he suggested. Mr Sharp, a member of the Bank’s Financial Stability Committee, spoke just days after Philip Hammond announced a £25 billion spending spree in the Budget and at a time when the Labour Party is advocating borrowing an extra £250 billion.

His comments, which will be seen as a warning to the Chancellor not to loosen the purse strings too far, mark a departure for the Bank, which usually steers clear of commenting on Government finances.

Mr Sharp said that there was a danger that the “benign” economic picture, with interest rates at record lows, could breed complacency. He added that if Britain continued to borrow it risked losing “fiscal space”, meaning “financial stability is jeopardised”.

His speech at University College London will also be cited as further evidence of the folly of Labour policy on public spending. Jeremy Corbyn announced during the general election campaign that he would ramp up debt by £250 billion to fund plans to nationalise railways and utilities.