Shares in British banks were up on the FTSE 100 in morning trading following an earlier dip brought about by continuing fears about the eurozone.

Yesterday European finance ministers met to discuss the eurozone's debt crisis, but said that its current emergency fund is sufficient to deal with any possible contagion.

Today the Irish government will be attempting to push its new austerity budget through parliament in order to qualify for the EU's 85 billion euro bailout.

Meanwhile in China it is believed that the government may well increase interest rates this week in a bid to rein in inflation.

In early trading banking shares fell, with Barclays down 1.2 per cent.

However later in the morning investors appeared to gain confidence and shares rose.

By 10:15 shares in Lloyds Banking Group were up 1.98 per cent to 67.41 pence per share, RBS shares increased 1.97 per cent to 41.93 pence per share, Barclays shares rose 1.05 per cent to 265.75 pence per share and HSBC shares climbed 0.34 per cent to 669.00 pence per share.

Overall the FTSE 100 was up 0.94 per cent to 5,824.33.