‘Debt is so cheap, people have been able to keep the party going’

at banks but Mr Gladstone said consumers were just as guilty.

“We are due another recession,” he said. “This has been the longest recovery since the Second World War and this is what happens when you are overdue a recession. People forget what it was like when half their friends lost their jobs.

“Many have forgotten they need a buffer of money. There are lots of risks in life and even though the chances of any individual one happening are small, it’s likely that something won’t go to plan.”

Mr Brodie said he shared some of Mr Carney’s past concerns but suggested that his warning might have been geared more towards cooling down the industry – and that it has had the required effect.

“A growing economy needs some fuel and often that fuel is credit,” he said. “The Bank doesn’t want to cut that off altogether, otherwise that hurts the economy, but they don’t want it to become overblown.”

Despite the concerns, in this climate of record low rates borrowing could make a good deal of sense for some – particularly trustworthy borrowers with high credit scores.

Scott Gallacher, an adviser at wealth manager Rowley Turton, said some of his clients had been able to take advantage of low rates on debt. “If you have a mortgage that you could pay off but you’re only paying 2pc, you might think ‘If I invest that money, will I make 2pc?’. You probably will. It’s not without its dangers but it could make sense for you,” he said.

He also said low rates had helped one of his clients cut annual interest payments on a £1m mortgage from almost £50,000 to £5,000, allowing them to keep paying school fees, for example. “Debt is so cheap that people have been able to keep the party going,” Mr Gallacher said.

By far the most popular reasons for taking out loans with Freedom Finance were to fund home improvements or to buy a car.

Mr Brodie said there were good reasons you might want to take out finance, saying “it all depends on individual circumstances, but for many it will be the right answer”.

He said uncertainty around Brexit had made people more reluctant to move home, choosing to stay put and refurbish instead. “A new car too is quite a big purchase. People in the middle classes will still need to raise funds for that and they will be able to borrow relatively cheaply.”

But Mr Gladstone had concerns. “There are definitely times when low-cost debt can work if you use it for another sensible investment,” he said. “But there’s good debt and bad debt. If it’s low cost and you have a good plan to pay it back, it can work, but there are always risks that we can’t predict.

“All it would take is for a recession to come along and suddenly that £20,000 you took out against your house doesn’t look like such a good idea.”