Quasars are the most luminous non-transient objects known, and as such they enable studies of the Universe at the earliest cosmic epochs. Despite extensive efforts, however, the quasar ULAS J1120+0641 at redshift z = 7.09 (hereafter J1120+0641) has remained the only one known at z > 7 for more than half a decade1. Here we report observations of the quasar ULAS J134208.10+092838.61 (hereafter J1342+0928) at a redshift of z = 7.54. This quasar has a bolometric luminosity of 4 × 1014L⊙ and a black hole mass of 8 × 108M⊙. The existence of this supermassive black hole when the Universe was only 690 million years old, just five per cent of its current age, reinforces early models of black hole growth that allow black holes with initial masses of more than about 104M⊙ (refs 2, 3) or episodic hyper-Eddington accretion4,5. We see strong evidence of the quasar’s Lyα emission line being absorbed by a Gunn–Peterson damping wing from the intergalactic medium, as would be expected if the intergalactic hydrogen surrounding J1342+0928 is significantly neutral. We derive a significant neutral fraction, although the exact value depends on the modelling. However, even in our most conservative analysis we find xHI > 0.33 (xHI > 0.11) at 68 per cent (95 per cent) probability, indicating that we are probing well within the reionization epoch.