FTSE relegation for Northern Rock

The crisis hit lender is poised to drop into the FTSE 250 after its recent woes saw it fall to 331st place, narrowly avoiding the humiliation of a fall straight into small cap territory.

Northern Rock's demotion will be confirmed when the FTSE committee meets to discuss the latest quarterly reshuffle, which is based on the market capitalisation of firms calculated using Tuesday's closing share prices.

Stocks have endured heightened volatility since the summer's credit crunch, which led to Northern Rock's funding crisis and the subsequent run on the bank.

Also on the way out of the top flight is newspaper group Daily Mail & General Trust, now ranked 118th, and in 117th place, sugars and ingredients firm Tate & Lyle, which recently reported a 19% drop in profits.

They are likely to be joined by Currys owner DSG International, which recently unveiled a 25% fall in first-half profits, Punch Taverns and housebuilder Barratt Developments, which only joined the FTSE 100 in June after its £2.2 billion takeover of Wilson Bowden.

All Bar One and Harvester owner Mitchells & Butlers are also on the relegation list. Shares in Mitchells & Butlers, which stands in 120th position, have been gradually drifting downwards since mid-May, when they touched the 900p mark, to close at 507p on Tuesday.

The group recently reported slowing sales growth and said costs linked to a shelved property deal with entrepreneur Robert Tchenguiz had risen to £260 million.

Companies due to take their place are Cairn Energy, Kelda Group whose time in the index could be short-lived as it is in the process of being taken over by an infrastructure consortium, Thomson holiday operator TUI Travel and bus and rail firm First Group.

Others that look set to be on the way up include Admiral, the car insurance group that was only created in 1991, security firm G4S and fashion house Burberry.