Shares in British banks were up on the FTSE 100 in morning trading following news that the U.S. Federal Reserve will be embarking on another stimulus in a bid to strengthen economic recovery.

The Federal Reserve said that it would be buying $600 billion in government bonds, although the initiative is not without its concerns.

Investors however seemed to be confident as banking shares rose and the FTSE 100 as a whole edged closer to the sacred 6,000 mark.

By 11:35 shares in Lloyds Banking Group were up 2.21 per cent to 70.73 pence per share, RBS shares increased 2.90 per cent to 46.48 pence per share, Barclays shares rose 2.74 per cent to 287.05 pence per share and HSBC shares climbed 3.49 per cent to 693.40 pence per share.

Overall the FTSE 100 was up 1.74 per cent to 5,849.09.