In addition, March is the month when bonuses to financial services workers show up. The bonus component rose from 1.3 per cent to 1.7 per cent.This is consistent with data showing that pay settlements are falling back. Figures yesterday from the Engineering Employers Federation showed settlements in April were stable at 2.6 per cent.Richard Iley, of ABN Amro, said: "With the economy only recording very modest GDP growth over the last six months, it seems counter-intuitive that bonus payments are accelerating. With short-term growth [still] sluggish and profitability under pressure, we would expect the contribution of bonuses to pay growth to fall back."The Government is happy to take some credit for what it sees as the success of its labour market reforms. Andrew Smith, Employment minister, said: "The New Deals are helping to ensure that more people are joining the labour market and getting access to jobs." More people were joining the labour market for whom family responsibilities, or illness or disability, might previously have been an "insurmountable barrier" to work, he added."The New Deals for lone parents and disabled people, together with the tax and welfare reform measures to make work pay, will build on this trend of greater participation in the active labour force.". t The long-running feud between Richard Branson's Virgin and British Airways continues to provide entertainment for onlookers. Virgin was set to fly out a pack of journalists to Shanghai to celebrate the launch of its first direct flight to that great Chinese city Then this week Virgin abruptly cancelled the trip.

Quick to sniff an advantage, BA stepped in on Tuesday to invite the dozen or so journalists to go to a Chinese restaurant instead - in Cape Town, South Africa. My man at Heathrow says: "We just thought it would be a fun thing to do. We heard Virgin had to cancel their Shanghai shebang, leaving a lot of disappointed journos. We thought a trip would ease their disappointment."The dozen lucky scribblers will, among other diversions, be taken to a bar to watch the FA Cup Final, a Cricket World Cup game and a spot of Rugby Super 12 live in South Africa.t Such is the range of Richard Branson's activities, he's seldom out of the headlines. Sea Containers, which owns Great North Eastern Railway (GNER), is suing its own law firm, Denton Hall, because it found out that Virgin Rail is getting legal advice from the same firm.Sea Containers is applying for an injunction to stop Denton Hall from misusing any confidential details of the rail franchise, according to Legal Week magazine.What makes this a particularly hot potato is that Tom Winsor was recently appointed the UK's rail regulator.And Mr Winsor used to head up the railways group at which law firm? That's right, Denton Hall ...t Dial 0171 325 9902 and you will get the following pre-recorded message: "You have reached JP Morgan at 60 Victoria Embankment Unfortunately the number you have dialled is incorrect. Please try again."Yes, but what's the correct number? A JP Morgan spokesman admits it could have been made clearer. (It's 0171 600 2300).t This week sees the departure of Eberhard von Kuenheim (70) after 30 years with the German car maker BMW.

Some mean-spirited shareholders are blaming him as supervisory board chairman for the losses at Rover (nearly a billion this year) and for the messy power struggle for his succession as ceo, which ended in the firing of Berndt Pischetsrieder and the departure of erstwhile heir apparent Wolfgang Reitzle for rival Ford.Von Kuenheim was born in the Prussian city of Konigsberg and served with the German navy in the Second World War.Between 1970 and 1993 he raised BMW from a niche outfit to Germany's Top Ten. He will now retire to his wife's family castle in Saxony, a 1,000- year -old edifice with a moat. He should feel safe from shareholders there.t Goodbye Sun Life of Canada. Please welcome "SLOC".The insurer explains in recent correspondence: "To avoid confusion with companies with similar names, Sun Life of Canada should .. be shortened to SLOC after the first mention" Doesn't exactly trip off the tongue. But at least SLOC, the Canadian owned insurer based in Basingstoke, Hampshire, will no longer be confused with Sun Life, which is owned by French giant AXA and is based in Bristol.t Last June, the Inland Revenue launched a pounds 3m pilot scheme called "Open For Business" in the Norwich area. It was meant to persuade small businesses to access government services over the Internet.The scheme is to be closed after just 11 firms used the service.Low points in the trial included a printer jamming at the Norwich Post Office site because customers thought it was a mail box, children surfing the Net at the Norwich Inland Revenue inquiry centre, and staff at the transaction sites finding it so difficult to send forms electronically that they printed them out and posted them to the relevant departments.The Revenue have put a brave face on it and claimed that the whole point of the trial was for it to be "a learning process".For more gory details consult the AccountingWEB Newswire on http:// www.accountingweb.co.uk..

NORWICH UNION yesterday caught the bid bug currently affecting financial stocks. The life assurer rose 19.5p to 434.5p with over 8.3m shares traded as a rumour of a tie-up with Lloyds TSB, 29.5p higher at 889p, gripped the market. Supporters of a Norwich-Lloyds deal claimed to have evidence to prove their story. They pointed to an article in a Swiss newspaper where the finance director Kent Atkinson was said to have expressed the bank's desire to expand through mergers or acquisitions. Apparently, he added that the UK was Lloyds' favourite hunting ground, although the US and Europe could not be ruled out. The Alpine story appeared to confirm recent mutterings by Lloyds over its ambitions to enlarge its operations and boost its products' offerings.Norwich Union was seen as an attractive target for Lloyds' cash pile as most of its life assurance offering would fit well with the bank's current range of savings instruments. Dealers argued that this would be a good time to have a pop at Norwich as it is trading near the bottom of its recent range and has underperformed the market over the past three months. They said that a merger between Lloyds, capitalised at around pounds 46bn, and Norwich Union, with a market value of some pounds 8bn, was the most likely outcome.The hot Norwich Union rumour, did not stop the speculation bonanza around Legal & General - another mooted Lloyds target.

The insurer closed down 2.5p to 168.5p but many dealing boys still believe that something is going to happen soon. The volume figure, an impressive 29.3m, supported the theory that Lloyds, an overseas rival, or even the beleaguered Barclays, up 42p to 1,815p, could strike. The blue-logoed bank was also dragged up by rehashed talk of a merger with Royal Bank of Scotland, up 40p at 1378p.The remaining blue-chips put in a resilient performance, thanks to a good opening by the Dow Jones and some encouraging domestic economic news. The FTSE 100 closed 60.3 higher at 6,266.7, very close to the day's peak as Wall Street shrugged off last night's decision by the Fed to move to an interest-rate tightening bias. The index was also helped by news that the Bank of England's decision to leave rates unchanged earlier this month came after a closer-than-expected 5-4 split.