Ban meat and ‘cancel Brexit’? A bank’s ‘outrageous’ predictions for 2023

Saxo Bank’s “strange predictions” for 2023 include a meat ban, soaring gold prices and a UK vote to “cancel Brexit”.

The Danish bank’s annual report, published earlier this month, expects global economies to transition to a “wartime economy” mode, “where economic interests are sovereign and the self-reliance outweighs globalization.”

The projections, while not representing the official position of the bank, do consider how policymakers’ decisions over the coming year could impact both the global economy and political agenda.

Gold hits $3,000

Among the bank’s “outrageous” calls for next year, Saxo Head of Commodities Strategy Ole Hansen predicts spot gold could exceed $3,000 an ounce by 2023 – about 67% higher. compared to the current price of about 1,797 USD/ounce.

Report released sudden prediction three factors: an “increasing war-economic sentiment” that makes gold more attractive as a foreign exchange reserve, large investments in new national security priorities, and increased global liquidity as the Policymakers try to avoid defaults during the respective recessions.

Steen Jakobsen, chief investment officer at Saxo, told CNBC’s “Squawk Box Europe” on Dec. 6: “I wouldn’t be surprised to see commodity-driven economies looking to gold because lack of better alternatives”.

“I think gold will fly,” he added.

While analysts are expecting gold prices to rise in 2023, a spike of that magnitude is unlikely, according to global commodity intelligence firm CRU.

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

“A less aggressive Fed could lead to a weaker dollar, which could give gold bulls more space and energy to mount a rally next year,” he said. , raising the price to nearly 1,900 USD/ounce.”

However, Kirilenko stressed that it all depends on the moves of the Federal Reserve. “Any signs of strengthening hawks from the US central bank are likely to put downward pressure on gold prices,” he said.

UK will vote no Brexit

According to Saxo’s Jakobsen, the most likely “excessive prediction” of next year is that there will be another Brexit referendum.

“I really think it’s one of those things that’s highly likely to happen,” he told CNBC.

Saxo market strategist Jessica Amir said British Prime Minister Rishi Sunak and Finance Secretary Jeremy Hunt could lower the Conservative Party’s ratings to “unprecedented lows” as their “brutal financial program pushes Great Britain into a severe recession”.

This could make the British and Welsh public rethink Brexit voting, the bank predicts, with young voters taking the lead, and force Sunak to call a general election.

Saxo’s Amir said the opposition Labor party could then win the election and promised a referendum to reverse Brexit on November 1, with a “rejoin” vote winning. win.

“Entrepreneurs are saying that the only thing they’re getting out of Brexit is the UK-specific GDPR,” Saxo’s Jakobsen told CNBC. “The rest is just increased bureaucracy,” he said.

Anand Menon, director of the UK think tank in a Changing Europe, said the prediction “didn’t count.”

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

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

Public sentiment towards Brexit has changed since the referendum, Menon said, after the vote resulted in a majority of 52% of voters choosing to leave the EU in 2016.

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

Research done by YouGov in November showed that 59% of 6,174 people surveyed think Brexit has gone “pretty bad” or “very bad” since the end of 2020, while just 2% say it has gone “very well”. .

Prohibited meat production

Meat is responsible for 57% of emissions from food production, according to research published by Natural foodand with countries around the world already making zero commitments, Saxo says it’s possible that at least one country could cut meat production entirely.

Saxo market strategist Charu Chanana said a country “looking to get ahead of others” in terms of its climate credentials could decide to levy a heavy tax on meat from 2025 and possibly ban it completely. all meat of live animal origin domestically produced by 2030.

“I wouldn’t be surprised to see schools in Denmark and Sweden ban meat altogether, that’s for sure,” Saxo’s Jakobsen told CNBC. “It sounds crazy to us old people,” he added.

The UK, European Union countries, Japan and Canada are among the countries with legally binding zero commitments.

The UK’s Department of the Environment, Food and Rural Affairs said there were “no plans” to impose a meat tax or ban meat production when contacted by CNBC.

An eventful 2023?

Some other “strange predictions” for next year from Saxo include the resignation of French President Emmanuel Macron, Japan’s peg to the US dollar at 200, and the creation of a European Union army. unified.

However, all predictions should be made with a pinch of salt. Saxo’s Jakobsen told CNBC there’s a 5-10% chance each forecast comes true.

The bank has made a series of “strange predictions” each year for the past decade, and some have actually come true – or at least approximated.

In 2015, Saxo predicted that the UK would Vote to leave the European Union after the UK Independence Party’s resounding victory, it predicted Germany would enter a recession in 2019 – which the country narrowly avoided – and it bets that bitcoin will experience a rapid rally in 2017.