Shares in British banks were up on the FTSE 100 in morning trading ahead of economic data from the U.S.

Later today data on U.S. personal income & spending and pending home sales is due to be released and will give some indications about the state of the U.S. economy.

Yesterday banking shares were lifted in early trading by news that Sir Richard Branson's Virgin Group is considering a July bid the 600 branches of Lloyds Banking Group. The part-nationalised bank is required to sell the branches by regulators after it received a bailout during the financial crisis.

By 09:50 shares in Lloyds Banking Group were up 2.81 per cent to 52.76 pence per share, RBS shares increased 2.20 per cent to 41.75 pence per share, Barclays shares rose 2.10 per cent to 277.00 pence per share and HSBC shares climbed 1.20 per cent to 631.40 pence per share.

Overall the FTSE 100 was up 1.14 per cent to 5,948.16.