The Bank of England came under fire last night for "institutional sexism", after it held a seminar for female staff to advise them on what clothing, shoes and make-up to wear.

In a week when the IMF announced that the British economy will be the hardest hit of all the developed nations, when strikes erupted across the country and as world leaders gathered in Davos to discuss global recession, senior figures at the Bank turned their minds to lipstick and high heels.

On Wednesday, Bank of England employees gathered for a Dress for Success summit, at which female employees were lectured on the importance of wearing appropriate jewellery and make-up in the workplace.

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A memo leaked from the meeting details the advice given to staff, including the warning that wearing certain accessories would make women workers look like prostitutes.

"Look professional, not fashionable; be careful with perfume; always wear a heel of some sort – maximum two inches; always wear some sort of makeup, even if it's just lipstick," read the memo. It was distributed by the professional image consultancy firm hired by the bank for the event.

"Shoes and skirt must be the same colour. No-nos include ankle chains – "professional, but not the one you want to be associated with" – white high heels; overstuffed handbags; an overload of rings, and double-pierced ears," it continued.

The Bank of England confirmed yesterday that the session had taken place, but refused to comment further.

Leading equal opportunities solicitors said last night that female employees would have a potential case for legal action against the Bank of England for sexual discrimination. "It is indicative of an institutionally sexist environment. If women are being judged by what they wear, then it suggests that they are being treated differently to male employees," said Lawrence Davies of solicitors Equal Justice .

"The fact that they are putting the responsibility on independent consultants doesn't absolve the bank of any sexist behaviour or attitudes that arise from this," said Mr Davies.

The bank's actions sparked widespread criticism, with leading City economists, MPs and women's rights groups all speaking out.

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"What the Bank of England is doing is appalling," said Ruth Lea, economic advisor to the Arbuthnot Banking Group and former director of the Centre for Policy Studies. "They are spending our money on these things. It is farcical.

"Surely it is up to men and women, and their peers at work to decide for themselves what is suitable to wear. If you can get a well-paid job, surely you have the nous to choose the right clothes," said Ms Lea.

The Fawcett Society, the leading women's rights group, said that the Bank of England's actions were sexist, and run contrary to equal opportunity legislation. "Not only will eyebrows be raised that an event like this has been held just as we are entering recession, but it sends out damaging messages to women working at the Bank of England," said Katherine Rake, director of the society.

"Setting down codes in this way sends a message to women employees that they have to look a certain way to be successful in business, and this is absolutely contra equal opportunities practice."

Corporate image consultants can cost anything up to £5,000 for a 30- minute session. While dress codes are standard in many professions, specifying the colour of heels that should be worn and insisting on make-up is interpreted by many as sexist.

But Pippa Rees, director of Naked Ambition Personal Branding Consultants, and a member of the Federation of Image Consultants, said: "How you dress can make you have more authority and command more respect. Women struggle with what to wear for business and formal wear, and image consultants can make women aware of how clothes can add to their credibility, and how they can diminish it.

"If you are a banker, a lawyer or an accountant you are a professional, and your client will expect you to look like one. A pilot's uniform denotes his ability to do the job, and professional dress does the same," said Ms Rees.

Accountancy firm Ernst & Young also courted controversy last November when it sent 400 female employees on a course to learn how to dress.

The backlash

'What the Bank of England is doing is appalling. They are wasting our money'

Ruth Lea

'[This tells] women employees that they have to look a certain way to be successful'

Katherine Rake

'If this is not a hoax, then they should be ashamed. It is not what they should be focusing on'

Patricia Hewitt MP

'I hope that there is no assumption that how you look dictates how you can do your job'

Baroness Morris