The Bank of England has come under fire from senior Conservative figures after it emerged that around 6,000 employees are permitted to work abroad for up to 40 days each year.
It sits alongside existing rules allowing staff to work remotely from home for up to three days each week under official Bank guidance.
The policy has sparked criticism as the central bank continues to face scrutiny over its handling of inflation, which stood at 2.8 per cent in April and remains above the Bank’s two per cent target.
Forecasters at Capital Economics have predicted inflation could rise to around four per cent later this year as conflict involving Iran pushes up energy prices for households and businesses.
Conservative Party chairman Kevin Hollinrake condemned the policy, saying Bank staff should be carrying out their work from “their desks, not their sun loungers”.
Mr Hollinrake argued that allowing employees to work overseas created security concerns and risked damaging productivity at a time when families were already under financial pressure.
“No wonder inflation has been off target for 19 months,” he said.
“Working overseas unnecessarily is both a security risk and a danger to productivity.
Bank of England staff criticised for working abroad as Conservatives attack inflation record
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“Hard-working families paying rising taxes, and struggling to afford a holiday, will be angry that public servants are soaking in the sun while on the clock.”
He also criticised the Government over working practices in the public sector.
“Meanwhile, under Labour, public servants are working fewer hours for the same pay,” Mr Hollinrake added.
Sir Jacob Rees-Mogg, the former minister for Government efficiency and a longstanding critic of remote working, also attacked the policy.
Mr Rees-Mogg attacked the Bank over the arrangement
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He said Bank staff should not be allowed to “swan off abroad” while the institution was failing to keep inflation under control.
“The Bank of England has failed in its main task of keeping inflation around 2pc,” Sir Jacob said.
“Instead of allowing people to swan off abroad, risking confidential information, it ought to focus on its main responsibility, which might then allow people in the private sector to afford fancy holidays.”
Sir Jacob also questioned whether employees able to work remotely for extended periods were essential to operations.
“If people can work from holiday homes for eight weeks of the year, are they really needed or could their salaries be saved?” he asked.
The Bank currently operates a hybrid working model requiring employees to attend the office for at least two days each week while they are in the United Kingdom.
Combined with the overseas working allowance, staff could theoretically spend close to two months away from Bank premises every year.
The policy was introduced following what an earlier code of conduct described as “an employee-instigated trip”, with part-time staff receiving a reduced allowance on a proportional basis.
Executive directors are required to confirm annually that their teams are complying with the rules, while restrictions also apply to taking electronic devices including laptops and mobile phones into certain countries.
A Bank of England spokesman defended the arrangements and said the policy was designed to support staff seeking temporary overseas working arrangements.
“The Bank has a working from abroad policy which is designed to support staff who wish to temporarily work outside of the UK,” the spokesman said.
“This is subject to time limits and other requisite and reasonable conditions, such as security-related restrictions.”