Shares in British banks were down on the FTSE 100 in morning trading as investors continued to fret about the prospects of economic recovery.

Yesterday banks were lifted in morning trading following the reports that HSBC is considering buying a stake of as much as 70 per cent in Nedbank, which is the fourth largest bank in South Africa.

However intense merger and acquisition activity: with BHP Billiton attempting a takeover of Potash, Vedanta Resources making a move for Cairn India and Korean National Oil Corporation going for Dana Petroleum, to name a few; has yet to dispel fears of a painfully slow recovery or even a double dip recession.

By 10:15 shares in Lloyds Banking Group were down 1.88 per cent to 68.33 pence per share, RBS shares declined 1.68 per cent to 44.93 pence per share, Barclays shares fell 1.63 per cent to 314.05 pence per share and HSBC shares dropped 0.70 per cent to 634.70 pence per share.

Overall the FTSE 100 was down 1.10 per cent to 5,177.27.