THE Government has sold off a further one per cent chunk in taxpayer-backed Lloyds Banking Group, reducing its overall stake to less than 10 per cent.

It means the Government has now raised £16 billion from the sale. All proceeds are used to reduce the national debt.

Chancellor George Osborne took to Twitter to describe dropping below the 10 per cent mark as a "big milestone in returning the bank to the private sector and getting taxpayers' money back".

While this sale will be available to City investors, the Government has announced plans to sell at least £2bn of shares to the public at a discounted price this spring.

Lloyds Banking Group announced on Wednesday that its quarterly profits had slipped despite attempts to reduce costs.

It said third quarter underlying pre-tax profit fell eight per cent to £2bn compared with a year ago.