Shares in British banks were up on the FTSE 100 in morning trading as movement at the European Central Bank appeared to offset fears about sovereign debt in the eurozone.

Yesterday's decision by the ECB to raise interest rates from 1.0 per cent to 1.25 per cent appeared to give investors hope that the general health of the eurozone's economy is good.

The rise in rates appeared to offset concerns about sovereign debt in the eurozone, which again came into the spotlight after Portugal became the third country this week to seek an EU bailout.

By 10:40 shares in Lloyds Banking Group were up 0.78 per cent to 62.34 pence per share, RBS shares increased 0.82 per cent to 43.27 pence per share, Barclays shares rose 0.49 per cent to 296.70 pence per share and HSBC shares climbed 0.02 per cent to 667.30 pence per share.

Overall the FTSE 100 was up 0.79 per cent to 6,054.62.