Taxpayer stake in bailed-out Lloyds reduced by a further 1%

The taxpayer stake in Lloyds Banking Group has been cut by one percentage point to just under 8%, the Government has announced.

It means more than £17bn has now been returned to the Treasury since the lender's £20.3bn bail-out during the financial crisis.

The latest 1% stake to be sold is worth around £400m at the bank's current market value, which has climbed by 8% over the last month.

However, the shares are trading at below the 73.6p "break-even" price at which the Treasury would recover the same amount of value it ploughed into them.

At its peak, the Government held 43% of the group, which includes Halifax and Bank of Scotland.

The announcement comes a day before Chancellor Philip Hammond delivers the Autumn Statement setting out his tax and spending plans to Parliament.

Mr Hammond said: "Selling our shares in Lloyds Banking Group 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."

A Lloyds spokesperson said the announcement reflected the work "to transform the group into a simple, low-risk and customer-focused bank".

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The Treasury holding in Lloyds has been gradually reduced.

Over the course of a trading plan from December 2014 it was cut back from 24.9% to 9.2%, with the shares were sold for an average of more than 80p.

This was suspended over the summer but was resumed last month even though the share price is now only around 60p.

The Government's stake has now been cut to 7.99%.

Ministers have abandoned plans for a share sale to the public, instead choosing to offload the holding to institutional investors.