Rachel Reeves is “repeating the reckless Labour playbook” which triggered the 2008 financial crash and risks plunging the UK into another economic crisis, a leading banking expert has warned. Bob Lyddon, a specialist in banking systems and financial regulation, and the founder of Lyddon Consulting Services, claimed the Chancellor was pursuing a “delusional” strategy built on the same policies which fuelled the boom-and-bust cycle under Gordon Brown’s Labour Government.

He said Ms Reeves was now actively dismantling key protections introduced after the global financial crisis — including limits on risky lending, safeguards around capital buffers, and rules to separate retail and investment banking — while simultaneously making exaggerated promises about stock market growth. He warned: “What we have is a reckless and desperate amateur engaging in another attempt to engineer a false ‘Boom’, a bubble that will inevitably pop as happened at the end of Labour’s last term, and doing so by reinstituting the exact same practices as seeded the ‘Boom’ and the ‘Bust’ last time around.”

Speaking to Express.co.uk, Mr Lyddon was highly critical of Ms Reeves’ recent claim that Labour had already “fixed the public finances and stabilised the economy”, pointing to warnings from both the Office for Budget Responsibility (OBR) and the Office for National Statistics (ONS) which indicate sluggish growth, persistently high taxes, and faltering productivity.

He said: “Does she not read the Financial Times or the reports sent to her by the OBR and ONS, which show the economy going south?”

Earlier this month, Ms Reeves announced a plan to “unlock billions” for lending and investment by relaxing regulations on how much capital banks must hold as a cushion against losses — a policy known as the Minimum Requirement for Own Funds and Eligible Liabilities (MREL).

She also pledged to “reform” ringfencing rules, which were brought in after the 2008 crisis to stop banks from using customer deposits to underwrite risky international or investment ventures.

Mr Lyddon said watering down those safeguards risked unleashing the same kind of “casino banking” which had left the taxpayer on the hook for billions when Northern Rock, Bradford & Bingley and Halifax Bank of Scotland collapsed.

He said: “Reeves now proposes that the controls over a repeat of that be ‘reformed’. That’s not reform — that’s regression.”

He also criticised proposals to loosen restrictions on mortgage lending, accusing the Chancellor of encouraging a return to “wild west” credit practices.

During a speech to the London Stock Exchange, Ms Reeves said she had asked the Bank of England to examine rules which prevent most banks from offering loans worth more than 4.5 times a borrower’s income.

But Mr Lyddon warned this was precisely the type of aggressive lending which fuelled the pre-crisis housing bubble.

He said: “During the ‘Boom’ phase, banks and building societies made mortgage loans of too great a multiple of people’s income, fuelling the rise in house prices. Reeves now wants to go back to that.”

He also took aim at Ms Reeves’ claim that “millions of people could be £9,000 better off” over 20 years if they moved £2,000 from cash ISAs into stocks and shares.

He said: “That’s a statement that would not be permitted if made by a regulated investment firm. Under current trends — instituted by Reeves herself — savers’ money will be put at high risk.”

Ms Reeves has positioned her reforms as part of a wider plan to boost investment and restore growth, claiming Labour will deliver “stability and a sustainable strategy for investment.”

But Mr Lyddon dismissed those claims as “counter-factual”, warning that the country was heading back into the same cycle of overleveraged credit, speculative investment, and taxpayer bailouts.

He added: “The same result beckons: taxpayers on the hook again when Boom turns to Bust.”

During her Mansion House speech on Monday, Ms Reeves said: “The Chancellor said: “We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth.

“Second, we’re providing certainty for banks operating in the UK, and ensuring that UK banks have the ability to compete internationally and drive economic growth.”

She continued: “Third, we’re doubling down on making the UK an innovation capital and the place of choice for fintechs to start up, to scale up and to list in the UK.

“Fourth, we’re seizing opportunities in areas where we are already world leading, including asset management, sustainable finance and specialty insurance.

“And fifth, we are delivering prosperity by increasing the firepower of our capital markets and boosting retail investment.”