Latest sale takes taxpayer’s stake in Lloyds below 9 per cent

The latest sell-off has brought in a further £340 million for the UK Treasury and means the taxpayer’s stake in the group – which also owns Bank of Scotland and Halifax – now stands at 8.99 per cent, with more than £17 billion being returned to government coffers since the lender’s bailout.

Mr Hammond had announced earlier this month that he was abandoning his predecessor George Osborne’s plan to offer the public cut-price shares in Lloyds and would instead sell the remaining stake on the stock market at prices below the 73.6p average price taxpayers paid for their stake.

The decision to sell this week was taken even though the shares are currently trading below the average paid by the taxpayer during the 2008 bailout which cost the UK Government £25 billion.

Mr Hammond said: “Selling our shares in Lloyds and making sure that we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities as Chancellor.”

The decision to abandon the retail offering to the public – a key pledge made by Mr Osborne – has infuriated some of the brokers hoping to handle the sale.

Hargreaves Lansdown has set up a petition asking the government to reconsider the decision.

Ian Gorham, chief executive of Hargreaves Lansdown, said: “Rather than engage with working taxpayers willing to invest in our economy, the government has favoured city institutions.”