High street lenders are bracing for a wave of mortgage and business defaults in the coming months.

The Bank of England’s quarterly credit conditions survey found that the volume of delinquent loans in the three months to September changed little from earlier in the year but suggested a reckoning is coming as jobs are lost and companies go bust in the final quarter.

Households remained largely protected by the furlough scheme in the three months to September but unemployment is rising and a less generous wage support scheme is in place from next month.

Defaults on personal and credit card loans are expected to increase as rising joblessness leads to more missed payments.