Mr Lloyd has been a non-executive director of the regulator since April 2019.

He will replace outgoing chair Charles Randell in the spring, according to Sky News.

The regulator announced that it had begun the hunt for a new chairman in October when it announced Mr Randell would step down a year earlier than planned.

Mr Randell became chair of the FCA and PSR Boards in April 2018 with the appointments for a five year term.

Mr Randell tendered his resignation to Chancellor Rishi Sunak and will quit as chair of the Financial Conduct Authority (FCA) and its sister Payment Systems Regulator (PSR).

Mr Randell has had to deal with a number of regulatory challenges and criticisms and the FCA had to apologise after its handling of the £236m London Capital & Finance mini-bond fiasco was widely criticised.

Mr Lloyd headed Which? for five years before departing in 2016.

A spokesperson for the FCA declined to comment.

The appointment comes as tensions continue to build between staff and management at the FCA.

Staff at the FCA voted last week on taking action over concerns about cost-cutting at the regulator. The ballot closed on Monday with 87% of staff voting yes on the industrial action ballot. 

Proposed cost cuts include pay cuts for staff.

Unite, the union representing staff, said the proposed cost-cutting measures would turn the FCA into a “bargain basement” regulator.

Unless a negotiated settlement is reached Unite can now proceed to a full industrial action ballot.