Govt's Lloyds Bank share sale postponed due to "market turbulence"

The government's plans to sell its remaining stake in Lloyds Banking Group has been postponed, according to reports.

Chancellor of the Exchequer George Osborne has said the offer will be delayed, blaming the move on "market turbulence" according to Sky News.

Shares in the bank have fallen 12.64p (16.51%) since the October announcement.

Osborne told BBC News that "now is not the right time" and that he would not give the go-ahead until the markets had calmed.

Hargreaves Lansdown senior analyst Laith Khalaf said the delay would be a big disappointment for the hundreds of thousands of investors keen to buy a chunk of the bank.

"But taking a big loss on selling shares when markets are low was always going to be a bridge too far for the Chancellor.

"The fall in the Lloyds share price has left them around 10p below what the government thinks it needs to break even, and together with the planned 5% discount and bonus share scheme would have meant the Chancellor putting his hand in his pocket, so now he looks to be pinning his hopes on a recovery in markets later in the year."

Khalaf said the timetable of spring which was announced last year was always very vague.

"The government are looking to obtain a good price for the remaining 10% of the Lloyds Banking Group they own and timing to get the best value around issues such as the Budget, financial and tax year end and Lloyd’s own financial calendar was always going to be tricky."

The Government said in October the sale, which was expected to be completed in spring, would raise at least £2bn to reduce national debt by selling shares to private investors.

The public would be offered a 5% discount off the market price, with those applying to invest less than £1,000 being given priority.