The fear of rising food prices weighed on the FTSE 100 yesterday after a dismal trading statement from Tate & Lyle which said rising maize costs in Europe would have a severe impact on profits.

While Tate shares dived 30 per cent to 390.5p, Compass Group, the world's largest catering firm, which also failed to inspire with a trading statement yesterday lost another 5 per cent to 294.5p.

Unilever, also seen as a potential victim of rising maize and cooking oil prices, lost 2.7 per cent to £15.49. AB Foods was off 12p at 791p. The price of both wheat and maize has been hit by larger swathes of agricultural land being given over to biofuel production.

Northern Rock fell 4.6 per cent to 184.8p on growing fears about its collapse, as it emerged it may have borrowed up to £8 billion from the Bank of England. RAB Capital announced after the market closed yesterday that it had brought its stake up from 6 per cent to 6.6 per cent. Bond holders are said to be forming a committee in the event of an insolvency.

Alliance & Leicester was also hit, losing 9p at 786p. Goldman Sachs today cut its price target to 815p from 912p.

Enterprise Inns dropped 2.6 per cent to 583.5p after a lacklustre trading statement in which it said it would delay raising £750 million of debt due before the end of the year, to 2008, because of credit market conditions.

Miners were hit by falling commodities prices and a downgrade from UBS. It cut Antofagasta from neutral to sell. Antofagasta lost 3.5 per cent to 761.5p

Lonmin, the platinum miner, however, was one of the top performing blue chips, up 3.4 per cent to £35.13 on continuing vague bid talk with Xstrata, up 0.5 per cent at £32 cited as the potential bidder. It may also benefit from the woes of rival Aquarius Platinum, unchanged at £17.30 which has a mine in Zimbabwe that may be under threat from the Government of Robert Mugabe.

Yell Group gained 1.4 per cent to 423.75p after Exane BNP Paribas upgraded its rating to "outperform" from "neutral" with a maintained price target of 540p.

Benfield, the insurer, was one of the best mid-cap performers, at first shooting up 10 per cent but later easing down to 3.7 per cent up at 280p on reports that Goldman Sachs had offered to buy it for £700 million but had been unable to raise financing. It also emerged that Harris Associates, the US activist investor, had increased its stake from 4.36 per cent to 6 per cent. Seymour Pierce said that if Goldman could not raise finance, it doubted any other potential venture capital buyers could. It said it expected the company to announce a share buyback.

Dana Petroleum gained 6 per cent to £11.57 after its partner in Norway said it had discovered oil with its first well.

But New Star Asset Management, the fund manager founded by John Duffield, lost 10.5 per cent to 375.75p after he said he was confident about prospects "subject to markets not deteriorating".

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