Shares in British banks were down on FTSE 100 in morning trading following the downgrade of Ireland's credit rating by Moody's ratings agency.

Ireland had its rating cut five notches from Aa2 to Baa1. Moody's said that yet more downgrades could come if the country fails to get its debt under control.

By 10:45 shares in Lloyds Banking Group were down 1.32 per cent to 68.05 pence per share, RBS shares dropped 2.09 per cent to 39.28 pence per share, Barclays shares fell 1.21 per cent to 260.30 pence per share and HSBC shares declined 0.57 per cent to 658.30 pence per share.

Overall the FTSE 100 dropped 0.1 per cent to 5,875.35.

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