Philip Hammond has signalled that the Government is likely to hold on to its stake in Royal Bank of Scotland until at least the end of the decade, as the bank announced it would take a $3.8bn (£3.1bn) provision for mis-selling toxic mortgage-backed securities in the US in the run-up to the financial crisis.

The Chancellor said the Government’s objective remained to "recover the money that the UK taxpayer has put into the bank" but added that the state-backed lender was in a different position to Lloyds due to a "number of legacy issues".

This includes the US settlement with the Department of Justice and the divestment of Williams and Glyn.