Donald Trump’s debt-fuelled spending and tax cut plans are a growing risk to the US and world economies, as a short-term boost threatens to turn into a bust next year.

Almost $400bn (£290bn) of extra spending combined with a $1.5 trillion tax cut in a booming economy could trigger overheating, top economists fear. A sharp interest rate rise in response typically leads to a downturn.

Both Jerome Powell, the new chairman of the Federal Reserve, and analysts at the International Monetary Fund (IMF) have warned against surging deficit spending, while avoiding direct criticism of the President.

Mr Powell told the US Senate: “We are not on a sustainable fiscal path. We need to get on one. This is a good time to be doing that, when the economy is strong.