By Jonathan Davies

The government has begun its sale of shares in the Royal Bank of Scotland (RBS).

UK Financial Investments, the body set up to manage the Treasury's stake in bailed out companies, sold 630 million shares at 330p, a 7.6p discount on yesterday's closing price. The sale raised £2.1 billion, which the Chancellor George Osborne says will go towards paying down the national debt.

Reports suggest 5.4% of the government's stake in RBS was sold, but Mr Osborne said it was 7% in a tweet.

The sale represents a 170p loss on the amount the government paid per share when it bailed out the bank in 2008. On that basis, the government is understood to have lost £1.07bn on this share sale alone.

George Osborne also claimed that Mark Carney, the governor of the Bank of England, believes that starting to sell shares now is in the “interests of the wider economy".

RBS chief executive Ross McEwan said: "I'm pleased the government has started to sell down its stake.

"It's an important moment and reflects the progress we are making to become a stronger, simpler and fairer bank. There is more work to be done but we're determined to build a bank the country can be proud of."