Andrew Bailey, the head of the Financial Conduct Authority, has emerged as the frontrunner to become the next governor of the Bank of England.

The selection of the chief executive of the UK financial watchdog is expected to be announced as early as Friday, according to the Financial Times, as time runs out to appoint a successor to Mark Carney before Christmas.

The next governor will be announced by the chancellor, Sajid Javid, and is due to start in February. Carney is scheduled to step down from the position at the end of January after extending his tenure at Threadneedle Street twice amid intense uncertainty over Brexit. He has been in the role since July 2013.

Carney agreed to stay on beyond the end of his original term in June 2018 to avoid disruption at the heart of the financial system as Britain leaves the EU. The decision was delayed again before the election and against a backdrop of continuing uncertainty over Brexit.

As the head of the City watchdog, Bailey is viewed by observers as a safe pair of hands with extensive experience as a former deputy governor at the Bank.

Other contenders thought to be in the running for the position included London School of Economics director Minouche Shafik, Santander UK chairwoman Shriti Vadera and a former member of the US Federal Reserve’s board of governors, Kevin Warsh.

The Treasury declined to comment.