Prime Minister Sir Keir Starmer has announced that the Payment Systems Regulator (PSR) - a sister organisation of the FCA and based in the same London offices - will be abolished as part of an efficiency drive.

The Prime Minister’s office said that the abolition of the regulator was the latest step in his drive to “reduce red tape” and burdens on businesses.

Government ministers have suggest a number of quangos could be axed.

The PSR, which regulates payment systems, will be consolidated into the Financial Conduct Authority.

Nikhil Rathi, CEO of the FCA, welcomed the change.

He said: “With a changed payments landscape, now is the right time to put in place a more streamlined regulatory framework. Doing so is a natural next step following recent work to improve co-ordination and clarity on regulatory responsibilities.

“We will work closely with government, the Bank of England and the payment sector as the details of this change are decided and to ensure the transfer of any powers is smooth. In the meantime, we will drive forward with change, including welcoming the deep expertise of PSR colleagues within the FCA.”

The Government is due to set out further steps on steps to abolishing the PSR over the next few days.

The PSR will continue to have access to its statutory powers until legislation is passed by Parliament to enact the abolition.

Chancellor Rachel Reeves, said: “The regulatory system has become burdensome to the point of choking off innovation, investment and growth. We will free businesses from that stranglehold, delivering on our Plan for Change to kickstart economic growth and put more money into working people’s pockets.” 

She added that the entire regulatory landscape will continue to be reviewed as part of a wider Government effort to kickstart economic growth.