OBR to cut forecast for bank share sales

Sky News reported that the OBR will project a "significant cut" in the sums that the Government will raise from disposing of stakes in Lloyds Banking Group and Royal Bank of Scotland, leaving the Treasury "facing a post-referendum black hole in the public finances".

In March, the OBR predicted a figure of £21.5bn from the sale of RBS shares alone between 2016-17 and 2019-20.

However this morning, shares in RBS had slumped, meaning that the taxpayer's entire 73% stake in the bank is now worth less than £18bn.

In May, Economic Secretary to the Treasury, Harriett Baldwin, announced plans to make "Lloyds shares available to the public this year", fully returning its stake to the private sector in 2016-17.

The government had initially planned to offer Lloyds shares to retail investors this spring, but George Osborne postponed the sale in January, blaming "turbulent markets".

The announcement came as the government received a dividend payment from Lloyds of £130 million, taking total dividends received to £318 million.

The latest dividend payment takes the total recovered to over £16.8 billion.