'Real progress' as Government reduces stake in Lloyds to below 5%

The Government has reduced its stake in Lloyds Banking Group to less than 5% as the lender moves one step closer to full private ownership.

UK Financial Investments, which manages the stake in Lloyds, cut its holding in the lender by around 1%.

It means the taxpayer's stake in the bank now stands at 4.99%, with more than £18.5 billion being returned to Government coffers since the lender's £20.3 billion bailout.

It is the latest in a series of share sales by the Government, which said in October it hoped to offload its remaining shares in Lloyds within a year.

The Government has progressively sold down its original 43% stake in Lloyds and Chancellor Philip Hammond ditched plans for a share sale to the public in October, opting instead to offload the holding to institutional investors.

Economic Secretary to the Treasury Simon Kirby said: "Since our decision to sell the Government's stake in Lloyds we have recovered over 90% of the money taxpayers injected into the bank during the financial crisis?.

"This represents real progress and I am delighted that we are on track to return Lloyds to private ownership."

All proceeds from the sale will be used to reduce the national debt.