Britain’s leading financial watchdog will let staff work from home three days a week until 2026, bucking the recent trend of companies ordering employees back to the office.

The Financial Conduct Authority (FCA) told staff at the end of last month that it will extend its post-Covid hybrid work policy, which requires them to be in the office just 40pc of the week.

This approach deviates from many of the companies it monitors across Britain, including some of the City’s largest banks that have demanded staff return to the office.

In a memo to its 5,000 staff in September, the FCA said it will conduct a review of its hybrid working policy next year but until that is concluded staff will be allowed to work from home three days a week.

The move is likely to fuel scrutiny of the under-fire regulator, which has faced criticism over its ever-expanding rule book and the greater bureaucracy imposed on firms.

Senior managers at the watchdog, which is led by Nikhil Rathi, already must spend at least 50pc of their time in the office – although this does not apply to the rest of the workforce.

The regulator’s stance puts it at odds with many of the companies it monitors.

Workers at Goldman Sachs, the Wall Street lender, recently changed its policy by demanding bankers come into the office every day while senior employees at JP Morgan must also be in five days a week.

David Solomon, the Goldman chief executive, has called hybrid working an “aberration”.

UK banks are yet to follow the lead of their American counterparts, with Lloyds Banking Group letting staff work in the office three days per week.

Barclays has forced its US-based investment bank staff back into the office every day but it maintains a hybrid working policy in the UK.

Santander recently increased its demands for office workers for the bank’s 10,000 staff, telling them to come in the equivalent of three days per week, up from two days.

The FCA publishes a set of expectations for companies if they wish to keep hybrid working, telling firms that “any material changes to how your firm intends to operate may require you to notify us first”.

In the memo, first reported by Bloomberg, the FCA said working from home can “sometimes provide a better environment for more focused work” and leads to an “improved work-life balance”.

It added that it would conduct a “deeper review” of hybrid working “over the coming months and into 2025” to help give staff certainty over the figure of their working patterns.

The FCA said: “Companies and organisations across the economy are considering what way of working is best for them and their people.

“Following the pandemic, our colleagues spend at least 40pc of their working time each month in one of our offices.

“To give our colleagues certainty about our long-term approach to hybrid working we’re undertaking a review, considering practices elsewhere, what the latest research shows, colleagues’ views and our organisational needs.”