The UK has consolidated its dominant position in offshore trading of the Chinese renminbi after handling record volumes in the second quarter, the City of London said, boosting the capital’s prospects as a key part of the global financial system after Brexit.

Six years after establishing itself in international offshore renminbi trading, London accounted for almost 39 per cent of the total, the City of London said, citing data from trade processor Swift. By comparison, Hong Kong accounted for just under 27 per cent in the first quarter of this year.

Average daily volumes stood at £69bn in the second quarter, up 13.5 per cent on the previous quarter and nearly a third higher than the same period in 2017, the authority said, citing data from the Bank of England and the People’s Bank of China.

“[Currency trading] is so much part of what is London’s great strength,” said Catherine McGuinness, chair of policy and resources at the City of London Corporation. “We like to think of London as the natural western end of China’s Belt and Road.”

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The City also wants to ensure that it can continue to dominate trading in the euro after the UK leaves the EU. Overall, London handled a total average of $2.7tn in currency trading a day, the latest BoE figures from April show. That was 15 per cent up on October 2017 and was the highest on record.

Trade in the euro against the dollar accounts for $778bn a day. A dent to those flows and all the related financial services associated with them, which still tower over renminbi business, would be potentially damaging. Still, Ms McGuinness said, “the rest of the world is big”.

The new report also noted that preparations for the Shanghai-London Stock Connect project, which will enable companies from the two countries to list instruments on each other’s exchanges, “have entered the last stage before the official launch”.

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