A retail offer in Lloyds shares, which was scheduled to take place next month, is almost certain to be scrapped because of the cost to the Treasury

Thousands of retail investors are likely to be denied the chance of buying shares in Lloyds at a discount as the government is expected to abandon the plan in the aftermath of market uncertainty caused by Brexit.

The government put plans for a “Tell Sid” offer of Lloyds shares on hold in January because of market turmoil. However, City sources believe that Philip Hammond, the chancellor, is about to abandon permanently the eye-catching offer that was announced by his predecessor, George Osborne, during the Conservative Party conference in October last year.

Scrapping the £2 billion offer — described by Mr Osborne at the time as “the biggest privatisation in 20 years” — would put the government on a collision course with private investors, many of