Shares in British banks were down in morning trading on the FTSE 100 after initial gains made yesterday on world markets turned to losses.

Yesterday saw shares rise after China said it would be introducing greater flexibility to its currency. However in the afternoon shares in the US started to decline due to uncertainty over China's long term plans for the yuan.

Shares were also stifled in morning trading ahead of the Emergency Budget to be announced today by Chancellor George Osborne. It is expected to be a very tough budget full of tax rises and public spending cuts.

By 09:41 shares in Lloyds Banking Group fell 0.19 per cent to 56.55 pence per share, RBS shares declined 0.47 per cent to 46.55 pence per share, Barclays shares dropped 2.71 per cent to 308.50 pence per share and HSBC shares were down 0.20 per cent to 658.20 pence per share.

Overall the FTSE 100 was down 0.72 per cent to 5,260.86.