Meat bans, soaring gold prices and ‘un-Brexit’? One bank’s ‘outrageous’ predictions for 2023

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

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

The forecasts, whereas not consultant of the bank’s official views, checked out how choices from policymakers subsequent 12 months might impression each the worldwide economic system and the political agenda.

Gold to hit $3,000

Among the bank’s “outrageous” calls for subsequent 12 months, Saxo Head of Commodity Strategy Ole Hansen predicted the value of spot gold might exceed $3,000 per ounce in 2023 – round 67% greater than its present worth of about $1,797 per ounce.

The report places its forecasted surge down to a few components: “an increasing war economy mentality” that makes gold extra interesting than international reserves, an enormous funding in new nationwide safety priorities, and growing world liquidity as policymakers attempt to keep away from debt debacles of their respective recessions.

“I would not be surprised to see commodity driven economies wanting to go to gold because of a lack of better alternatives,” Steen Jakobsen, chief funding officer at Saxo, instructed CNBC’s “Squawk Box Europe” on Dec. 6.

“I think gold is going to fly,” he added.

While analysts predict a rise within the worth of gold in 2023, a surge of that magnitude is unlikely, in keeping with world commodities intelligence firm CRU.

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

“A less hawkish Fed is likely to lead to a weaker USD, which could in turn give gold bulls more breathing space and energy to stage a rally next year, lifting prices closer to $1,900 per ounce,” he stated. 

Kirilenko highlighted, nonetheless, that it is all depending on strikes by the Federal Reserve. “Any hint of increasing ‘hawkishness’ from the US central bank would likely pressure gold prices lower,” he stated.

Britain will vote to un-Brexit

The “outrageous prediction” most certainly to happen subsequent 12 months, in keeping with Saxo’s Jakobsen, is for there to be one other referendum on Brexit.

“I actually think it’s one of the things that will have a high probability,” he instructed CNBC.

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

This, the financial institution forecasted, might immediate the English and Welsh public to rethink the Brexit vote, with youthful voters main the way in which, and pressure Sunak to name a common election.

Saxo’s Amir stated the opposition Labour occasion might then win the election and promise a referendum to reverse Brexit for Nov. 1, with the “re-join” vote profitable.

“Business people are saying the only thing they’ve gained from Brexit is U.K-specific GDPR,” Saxo’s Jakobsen instructed CNBC. “The rest is just increased red tape,” he stated.

Anand Menon, director of the suppose tank UK in a altering Europe, stated this prediction “just doesn’t compute.”

“I don’t think there will be another referendum and the idea that [Labour leader Keir] Starmer would adopt that position is for the birds,” he stated.

Starmer instructed a enterprise convention in September that his occasion would “make Brexit work.”

Public sentiment towards Brexit has modified because the referendum, Menon stated, after the vote resulted in a slim majority of 52% of voters opting to go away the EU again in 2016.

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

Research carried out by YouGov in November confirmed 59% of the 6,174 individuals surveyed thought Brexit had gone “fairly badly” or “very badly” because the finish of 2020, whereas solely 2% stated it had gone “very well.”

Meat manufacturing to be banned

Meat is accountable for 57% of emissions from meals manufacturing, in keeping with analysis revealed by Nature Food, and with nations the world over having made net-zero commitments, Saxo says it’s doable a minimum of one nation might minimize out meat manufacturing fully.

One nation “looking to front-run others” on its local weather credentials might determine to closely tax meat from 2025 and might ban all domestically produced dwell animal-sourced meat fully by 2030, Saxo Market Strategist Charu Chanana stated.

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

The U.Okay., nations 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 stated there have been “no plans” to introduce a meat tax or ban meat manufacturing when contacted by CNBC.

An eventful 2023?

Some of the opposite “outrageous predictions” for subsequent 12 months from Saxo embody the resignation of French President Emmanuel Macron, Japan pegging the yen to the U.S. greenback at a price of 200 and the formation of a united European Union navy.

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

The financial institution has made a set of “outrageous predictions” annually for the final decade and some have truly come true — or a minimum of come shut.

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