World Bank warns on rate rise, M&A surge, and chaos at a conference

The daily briefing “FirstFT” from the Financial Times.

The US Federal Reserve risks triggering “panic and turmoil” in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing, the World Bank’s chief economist has warned.

Rising uncertainty over growth in China and its impact on the global economy meant a Fed decision to raise its policy rate next week, for the first time since 2006, would have negative consequences, Kaushik Basu told the Financial Times. (FT)

In the news

M&A market surges forward Global market volatility shows no sign of damping companies’ appetite for dealmaking, as $40bn in new transactions worldwide were announced on Tuesday in what is on track to be a record year for mergers and acquisitions. M&A activity included Hong Kong tycoon Li Ka-shing’s $12bn utility deal and Mitsui Sumitomo’s $5.3bn bid for UK-listed insurer Amlin. (FT)

‘Catastrophic engine failure’ At least 14 people have been injured after a London-bound British Airways flight caught fire at Las Vegas airport shortly before takeoff. The pilot of the aircraft told passengers after the incident that the fire was the result of a “catastrophic failure of the engine.” (The Guardian)

Long lives the Queen After 63 years on the throne, Queen Elizabeth II today passes Queen Victoria as the longest-ruling British head of state. Matthew Engel writes that in her six-decade reign, the monarch has never faced an existential threat, while James Mackintosh looks at her rather diverse investment portfolio. (FT)

Kentucky clerk freed A US town official who refused to issue gay marriage licences on the basis of her Christian faith has been released from jail, with a warning that she must not interfere with due process. After leaving the jail, Kim Davis was greeted by crowds of supporters as the song “Eye of the Tiger” blared nearby. (BBC)

Bush dials China for donations US presidential hopeful Jeb Bush is tapping compatriots in China for campaign contributions as he starts a series of fundraising calls in Asia to raise money for the 2016 race. Mr Bush this morning spoke via video conference with 40 expats in Hong Kong, each of whom had paid $2,700 to attend the event. (FT)

It’s a big day for

Apple, which is set to launch its latest suite of products, including a new iPhone and Apple TV set-top box. The iPhone 6S is expected to focus on improvements to its touchscreen technology, camera and processor, rather than the total redesign seen last year. (FT)

Israel-UK relations Benjamin Netanyahu arrives in the UK on a two-day visit to a key European ally at a time when Israel is at odds with the EU over a range of issues, from stalled peace talks to the labelling of products made in Jewish settlements. (FT)

Food for thought

China gives Bon Jovi a bad name The ageing rock band has had the plug pulled on its first concerts in China after eagle-eyed officials learnt the Dalai Lama had featured in a backdrop in a concert five years ago. The abrupt cancellation of two concerts next week makes the enduring American rockers the latest musicians to fall foul of Chinese sensitivities. (FT)

Not your typical conference A homeopathy forum in Germany ended in chaos after delegates took an LSD-like hallucinogenic drug and ended up “rolling in a meadow, talking gibberish.” Police are investigating whether the incident was part of a joint experiment or a prank. (The Independent)

The case for keeping US rates low Martin Wolf argues that after seven years at zero, there’s no need to be hasty with a rate rise. “The decision on when to raise rates, then, has to be seen as one of risk management under asymmetric pay-offs: if the Fed is too late, inflation might rise; if the Fed is too early, it might diminish future room for manoeuvre.” (FT)

Walking away from Wall Street A wave of veteran financiers quit the big banks to start “boutique” firms. Can they outlast the M&A boom? (FT)

Some reasons to holiday If you didn’t get away this summer, here might be the perfect excuse. Not taking a holiday can have a profound effect on your physical and mental health, as well as work productivity, according to an array of studies. (Quartz)

Video of the day

Calm breaks out John Authers reports on a stronger day for world stock markets, even as Chinese imports fell again, with European data suggesting the eurozone can withstand that better than had been feared. (FT)

This article is published in collaboration with FirstFT. Publication does not imply endorsement of views by the World Economic Forum.

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Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: The United States Federal Reserve Board building is shown  REUTERS/Gary Cameron.