Shares in British banks were down on the FTSE 100 in morning trading as concerns about the state of the European economy continued.

In recent weeks banking shares have been hit by investor worries about the ongoing eurozone debt crisis, which saw Ireland accept an 85 billion euro rescue deal from the European Union. The bailout however only led to speculation that more bailouts were on the way for Portugal and perhaps even Spain and Italy.

Today however Hungary came into the picture, which although not in the eurozone, is still a cause for concern. Ratings agency Moody's today cut Hungary's credit rating two notches to Baa1.

By 10:05 shares in Lloyds Banking Group were down 0.48 per cent to 66.05 pence per share, RBS shares dropped 1.35 per cent to 40.90 pence per share, Barclays shares declined 1.45 per cent to 264.10 pence per share and HSBC shares fell 0.62 per cent to 661.70 pence per share.

Overall the FTSE 100 was down 0.13 per cent to 5,737.69.