Shares in British banks were broadly up on the FTSE 100 in morning trading after news that the European Union has agreed a rescue deal for Ireland.

The EU is to provide a loan package worth 85 billion euros, which will be used to save Irish banks from their own bad debts and to reduce Ireland's budget deficit.

Last week the Irish government announced a new austerity budget in order to qualify for the package. The budget will see public spending fall by 15 billion euros and is set to cost 25,000 public sector jobs.

By 10:55 shares in RBS were up 0.52 per cent to 38.89 pence per share, Barclays shares rose 0.33 per cent to 260.65 pence per share and HSBC shares increased 1.64 per cent to 661.80 pence per share.

Lloyds Banking Group shares however declined 1.10 per cent to 61.17 pence per share.

Overall the FTSE 100 was down 0.28 per cent to 5,652.56.