Shares in British banks were up on the FTSE 100 in morning trading, despite the government yesterday raising its banking levy.

The Chancellor of the Exchequer, George Osborne, surprised banks in the morning yesterday when he rose the levy on bank profits from 0.05 per cent to 0.1 per cent.

The levy was originally supposed to be raised to 0.1 per cent in March. The decision to raise the levy early means the government will be able to take another £800 million from the banks, in addition to the £1.7 billion it was already set to receive.

However the news did little to deter investors.

By 10:15 shares in Lloyds Banking Group were up 0.74 per cent to 66.44 pence per share, RBS shares increased 0.22 per cent to 44.63 pence per share, Barclays shares rose 0.84 per cent to 317.00 pence per share and HSBC shares climbed 0.79 per cent to 723.80 pence per share.

Overall the FTSE 100 was down 0.31 per cent to 6,072.24.

Barclays HSBC FTSE