Layers with fx not responding to blend modes

I think I may have inadvertantly changed a setting somewhere and it has seriously affected my work. I hope someone can shed some light please.

I have suddenly found that when I use fx on a layer that the layer will no longer respond to blend modes and also a clipped layer above fails to have any effect. I'm sure I used to be ableto do this, so I'm assuming I've clicked something by mistake, but I've no idea what.

Here is an example:

I have a colour layer 1

A layer 2 - item with a pattern overlay applied.

Normally I put layer 2 on multiply the pattern would blend into layer 1, but - no change.

So I tried creating a layer 3 of a different solid colour on screen, clipping it to layer 2 - but as soon as I clip layer 3 to layer 2 the effect disappears and it's as if there is no layer 3 at all.

What is goin on?