Andrew Bailey to be next Bank of England governor

Bailey has worked at the BoE and was a deputy governor before running the FCA from 2016. He has been one of the leading candidates to become the central bank's 121st governor but his chances appeared to be undermined by the FCA's handling of of scandals such as the collapse of Neil Woodford's investment firm.

The Financial Times, which broke the story, said other candidates such as Minouche Shafik, director of the London School of Economics, had been told they were out of the running. Chancellor Sajid Javid is likely to announce Bailey's appointment on Friday. He would take over from Carney at the start of February.

Simon French, chief economist at Panmure Gordon, told the BBC: "It's not an entirely unblemished record [for Bailey] as regards his most recent role as head of the Financial Conduct Authority. There have been a number of crises, which the perception is that he has struggled to get control of.

"He was the frontrunner when the [appointment] exercise kicked off. We had a series of names, both domestic and abroad, put into the frame who seem to now have fallen to the wayside while Andrew Bailey has played a slow but steady campaign and appears now to have triumphed."

The appointment of the next governor has been delayed by the change of leadership of the ruling Conservative party and the general election. Carney has delayed his departure twice amid political turmoil over Brexit. The BoE will have to navigate through Brexit and a slowing economy with interest rates already near rock-bottom.

The FT said candidates' views on leaving the EU helped decide who got the governor's job with Shafik deemed too anti-Brexit. Carney was criticised by pro-Brexit politicians such as Jacob Rees-Mogg for taking too negative a view of the economic implications of leaving the EU.

Bailey's main task at the BoE will be to set borrowing costs as chair of the monetary policy committee. The committee voted to keep rates unchanged at 0.75% on Thursday but two members voted for a rate cut based on anaemic economic data. The economy flatlined in October, industry surveys have painted a gloomy picture and the employment market is showing signs of weakening.

He will also have to deal with the fallout from the revelation that hedge funds listened in to early audio feeds of BoE press conferences seeking to gain from the time advantage of hearing the views of Carney and other officials that can move markets.