Shares in British banks were down on the FTSE 100 after Ben Bernanke, Chairman of the U.S. Federal Reserve, made a speech yesterday.

Mr Bernanke said he would not be expanding the Federal Reserve's $600 billion quantitative easing (QEII) programme and indicated that he would not be taking much action to tackle rising inflation.

He said that rising oil prices, the main driver of inflation, could not be altered by Federal Reserve decisions or policies.

The news did little to inspire confidence, with gold prices reaching another record high, as investors turned from the dollar to the age-old commodity.

Investors in banking shares also appeared to be lacking confidence, with all of Britain's "big four" banks seeing their share prices fall.

By 09:50 shares in Lloyds Banking Group were down 0.50 per cent to 59.49 pence per share, RBS shares dropped 0.12 per cent to 41.40 pence per share, Barclays shares fell 0.17 per cent to 287.00 pence per share and HSBC shares declined 0.55 per cent to 654.30 pence per share.

Overall the FTSE 100 was up 0.01 per cent to 6,069.01.