Shares in British banks were broadly down on the FTSE 100 in morning trading after Moody's cut the sovereign rating of Ireland and held the nation's outlook on negative.

Moody's cut Ireland's rating two notches from BAA3 to BAA1, saying that the country may need to embark on yet more austerity measures. In addition Ireland may have its finances negatively affected by the recent rise of interest rates by the European Central Bank.

There was some hope held out by Moody's however, with the agency saying that Ireland had better long term growth prospects than many other advanced nations.

By 09:25 shares in Lloyds Banking Group were down 0.38 per cent to 59.77 pence per share, RBS shares dropped 0.85 per cent to 43.16 pence per share and Barclays shares declined 1.04 per cent to 298.65 pence per share.

However HSBC saw its shares rise 0.03 per cent to 653.50 pence per share.