Chinese bank increases UK investment

The owner of the largest coal-fired power station in the UK has seen China's central bank acquire a stake, it has been reported.

According to the Daily Telegraph, the People's Bank of China has spent the past year building its stake in Selby-based Drax to the point where it reportedly now holds a 0.7 per cent share of the firm.

Speaking to the newspaper, a Drax spokesman said "We welcome all long-term shareholders" and revealed the firm was aware of the bank's investment, which is worth around £18 million.”

The development is the latest recent incident in which the People's Bank of China has acquired stakes in UK firms.

Last month, it was revealed that the bank has increased its share in insurance firm Prudential to one per cent, with assurers Legal & General and Old Mutual also being named as investment targets for the financial institution.

A source familiar with the move told the Financial Times: "[The Chinese] have a one per cent stake in many FTSE 100 businesses.

In April, Chancellor Alistair Darling attended Beijing's China-UK Economic and Financial Dialogue, where he noted that London attracts more Chinese inward investment than any other European location and welcomed more from the country's private sector and sovereign wealth funds.