Shares in British banks were mixed in morning trading on the FTSE 100 as investors continued to act cautiously in the face of an uncertain global economic recovery.
The governor of the Bank of England, Mervyn King, has warned that inflation is likely to remain well above the two per cent target until the end of 2011.
However King said that the BoE would be willing to raise interest rates or end quantitative easing in order to prevent the "destructive" effects of high inflation.
This morning the BoE said that at its Monetary Policy Committee meeting this month, the nine-strong committee voted 8-1 in favour of holding interest rates at 0.5 per cent for the seventeenth month in a row.
Investors however were still unsure about the prospects for the economic recovery, leading to mixed results on the FTSE 100.
By 10:40 shares in Lloyds Banking Group were up 0.50 per cent to 71.04 pence per share, RBS shares were down 0.42 per cent to 47.05 pence per share, Barclays shares fell 0.01 per cent to 327.05 pence per share and HSBC shares declined 1.60 per cent to 657.00 pence per share.
Overall the FTSE 100 was down 0.49 per cent to 5,324.29.