Mr Bailey will become the 121st governor of the bank on 16 March 2020.

He will take over from Mark Carney and will serve a full eight-year term in the post.

The search for the new governor was initiated in April and Mr Bailey, who previously worked for the Bank of England for over 20 years, was seen as an early favourite for the role.

However, the FCA has faced mounting criticism over the past few months regarding its regulatory scrutiny of the fund of one of the UK’s best-known money managers, Neil Woodford. The fund was suspended in June and subsequently closed with investors expected to lose significant sums of money.

Chancellor Sajid Javid stated in his announcement of the appointment that Mr Bailey was “the stand-out candidate in a competitive field. He is the right person to lead the Bank as we forge a new future outside the EU and level-up opportunity across the country.”

Mr Bailey said it was a “tremendous honour” to be selected for the role, the BBC reports.

He said: “The Bank has a very important job and, as governor, I will continue the work that Mark Carney has done to ensure that it has the public interest at the heart of everything it does.”

Keith Skeoch, chief executive officer of Standard Life Aberdeen, said: “Andrew Bailey’s appointment as Governor of the Bank of England is welcome. Given his breadth of experience and expertise, both within the Bank and across the financial sector, he was the natural choice to succeed Mark Carney.

“He will take over the reins at a tricky time given the range of uncertainties which seem likely to dominate the monetary and financial policy debate in 2020 and beyond. As such another safe pair of hands on the tiller will be most welcome.  I look forward to working with him.”

Guy Foster, head of research at wealth manager Brewin Dolphin, said: “Andrew Bailey makes a sound choice for the governorship of the Bank of England. During the financial crisis, in his rather anachronistic sounding role of Chief Cashier, he had responsibility for liquidity so he was very much on the front line.

“There has been much scrutiny of the bank’s activities but we understand Mr Bailey acquitted himself well, earning promotion and latterly the challenge of leading the FCA.”