Meat bans and ‘un-Brexit’? One bank’s ‘outrageous’ 2023 predictions

Saxo Bank’s “outrageous predictions” for 2023 include a ban on meat production, skyrocketing gold prices and Britain voting to “un-Brexit.”

The Danish bank’s annual report, published earlier this month, expects global economies to shift into “war economy” mode, “where sovereign economic gains and self-reliance trump globalisation.”

The forecasts, while not representative of the bank’s official views, checked out how decisions from policymakers next 12 months could impact each the worldwide economy and the political agenda.

Gold to hit $3,000

Among the many bank’s “outrageous” calls for next 12 months, Saxo Head of Commodity Strategy Ole Hansen predicted the worth of spot gold could exceed $3,000 per ounce in 2023 – around 67% higher than its current price of about $1,797 per ounce.

The report puts its forecasted surge all the way down to three aspects: “an increasing war economy mentality” that makes gold more appealing than foreign reserves, an enormous investment in latest national security priorities, and increasing global liquidity as policymakers attempt to avoid debt debacles of their respective recessions.

“I’d not be surprised to see commodity driven economies wanting to go to gold due to an absence of higher alternatives,” Steen Jakobsen, chief investment officer at Saxo, told CNBC’s “Squawk Box Europe” on Dec. 6.

“I feel gold goes to fly,” he added.

While analysts expect a rise in the worth of gold in 2023, a surge of that magnitude is unlikely, in response to global commodities intelligence company CRU.

“Our price expectations are far more moderate,” Kirill Kirilenko, a senior analyst at CRU, told CNBC.

“A less hawkish Fed is prone to result in a weaker USD, which could in turn give gold bulls more respiration space and energy to stage a rally next 12 months, lifting prices closer to $1,900 per ounce,” he said. 

Kirilenko highlighted, nevertheless, that it’s all depending on moves by the Federal Reserve. “Any hint of accelerating ‘hawkishness’ from the US central bank would likely pressure gold prices lower,” he said.

Britain will vote to un-Brexit

The “outrageous prediction” most probably to occur next 12 months, in response to Saxo’s Jakobsen, is for there to be one other referendum on Brexit.

“I actually think it’s one in every of the things that may have a high probability,” he told CNBC.

Saxo Market Strategist Jessica Amir said British Prime Minister Rishi Sunak and his Finance Minister Jeremy Hunt may take Conservative Party rankings to “unheard-of lows” as their “brutal fiscal programme throws the UK right into a crushing recession.” 

This, the bank forecasted, could prompt the English and Welsh public to rethink the Brexit vote, with younger voters leading the way in which, and force Sunak to call a general election.

Saxo’s Amir said the opposition Labour party may then win the election and promise a referendum to reverse Brexit for Nov. 1, with the “re-join” vote winning.

“Business persons are saying the one thing they’ve gained from Brexit is U.K-specific GDPR,” Saxo’s Jakobsen told CNBC. “The remainder is just increased red tape,” he said.

Anand Menon, director of the think tank UK in a changing Europe, said this prediction “just doesn’t compute.”

“I do not think there will probably be one other referendum and the concept [Labour leader Keir] Starmer would adopt that position is for the birds,” he said.

Starmer told a business conference in September that his party would “make Brexit work.”

Public sentiment toward Brexit has modified for the reason that referendum, Menon said, after the vote resulted in a slim majority of 52% of voters opting to go away the EU back in 2016.

“It’s absolutely the case that public opinion appears to be turning,” he said. 

Research carried out by YouGov in November showed 59% of the 6,174 people surveyed thought Brexit had gone “fairly badly” or “very badly” for the reason that end of 2020, while only 2% said it had gone “thoroughly.”

Meat production to be banned

Meat is accountable for 57% of emissions from food production, in response to research published by Nature Food, and with countries the world over having made net-zero commitments, Saxo says it is feasible at the least one country could cut out meat production entirely.

One nation “trying to front-run others” on its climate credentials may resolve to heavily tax meat from 2025 and will ban all domestically produced live animal-sourced meat entirely by 2030, Saxo Market Strategist Charu Chanana said.

“I would not be surprised to see schools in Denmark and Sweden banning meat altogether, it’s definitely going that way,” Saxo’s Jakobsen told CNBC. “It sounds crazy for us old people,” he added.

The U.K., countries within the European Union, Japan and Canada are among the many nations with legally binding net-zero pledges.

The U.K’s Department for Environment Food and Rural Agriculture said there have been “no plans” to introduce a meat tax or ban meat production when contacted by CNBC.

An eventful 2023?

A few of the other “outrageous predictions” for next 12 months from Saxo include the resignation of French President Emmanuel Macron, Japan pegging the yen to the U.S. dollar at a rate of 200 and the formation of a united European Union military.

The predictions should all be taken with a pinch of salt, nevertheless. Saxo’s Jakobsen told CNBC that there was a 5-10% likelihood of every forecast coming true.

The bank has made a set of “outrageous predictions” annually for the last decade and a few have actually come true — or at the least come close.

In 2015, Saxo forecasted that the U.K. would vote to go away the European Union following a United Kingdom Independence Party landslide, it predicted Germany would enter a recession in 2019 – which the country narrowly avoided – and it wagered that bitcoin would experience a meteoric rally in 2017.