Europe's leading financial regulator has said it will review the vast set of trading and investment rules that came into force this year if Brexit negotiations fail, sparking fears among financiers and politicians of painful market upheaval.

The concerns are particularly acute in the City of London, where market experts worry any further changes to the EU's latest Markets in Financial Instruments Directive, known as Mifid II, will put the UK at a competitive disadvantage to other major trading centres across Europe.