Meat bans, soaring gold prices and Britain’s vote for “un-Brexit” could be on the cards for 2023, according to Saxo’s Outrageous Predictions.
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Saxo Bank’s “outrageous predictions” for 2023 include a ban on meat production, soaring gold prices and Britain̵[ads1]7;s vote for “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-confidence trump globalisation”.
While the forecasts are not representative of the bank’s official views, they looked at how decisions by policymakers next year could affect both the global economy and the political agenda.
Gold at $3,000
Among the bank’s “outrageous” calls for next year, Saxo’s head of commodity strategy Ole Hansen predicted the price of spot gold could exceed $3,000 an ounce in 2023 – around 67% higher than today’s price of around $1,797 an ounce.
The report puts the expected increase down to three factors: “a growing war economy mentality” that makes gold more attractive than foreign reserves, a heavy investment in new national security priorities, and increasing global liquidity as policymakers try to avoid debt debacles in their respective recessions.
“I wouldn’t be surprised to see commodity-driven economies looking to go to gold for lack of better options,” Steen Jakobsen, chief investment officer at Saxo, told CNBC’s “Squawk Box Europe” on Dec. 6.
“I think gold is going to fly,” he added.
While analysts expect a rise in the price of gold in 2023, an increase 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 hawkish Fed is likely to lead to a weaker USD, which in turn could give gold bulls more breathing room and energy to stage a rally next year, lifting prices closer to $1,900 an ounce,” he said.
However, Kirilenko emphasized that everything depends on moves by the Federal Reserve. – Any hint of increasing “hawkishness” from the US central bank is likely to push gold prices down, he said.
Britain will vote to cancel Brexit
The “outrageous prediction” that will most likely happen next year, according to Saxos Jakobsen, is that there will be another referendum on Brexit.
“I actually think that’s one of the things that will have a high probability,” he told CNBC.
Saxo’s market strategist Jessica Amir said UK Prime Minister Rishi Sunak and his Chancellor of the Exchequer Jeremy Hunt could take Conservative party ratings to “unheard of lows” as their “brutal fiscal program plunges Britain into a crushing recession”.
This, the bank predicted, could prompt the English and Welsh public to reconsider the Brexit vote, with younger voters leading the way, and force Sunak to call a general election.
Saxo predicts that another Brexit referendum could be on the cards for the UK.
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Saxo’s Amir said the opposition Labor party could then win the election and promise a referendum to reverse Brexit for November 1, with the “re-join” vote winning.
“Business people say the only thing they got out of Brexit is the UK-specific GDPR,” Saxos Jakobsen told CNBC. “The rest is just increased bureaucracy,” he said.
Anand Menon, director of the Britain in a Changing Europe think tank, said this prediction “just doesn’t add up.”
“I don’t think there will be another referendum and the idea of it [Labour leader Keir] Starmer would take that position is for the birds,” he said.
Mr Starmer told a business conference in September that his party would “make Brexit work”.
Public attitudes to Brexit have changed since the referendum, Menon said, after the vote resulted in a narrow majority of 52% of voters opting to leave the EU back in 2016.
“It’s certainly the case that public opinion seems to be turning,” he said.
Research carried out by YouGov in November found that 59% of the 6,174 people polled thought Brexit had gone ‘fairly badly’ or ‘very badly’ since the end of 2020, while just 2% said it had gone ‘very well’ .
Meat production must be banned
Meat is responsible for 57% of emissions from food production, according to research published by Nature Food, and with countries around the world committed to net zero, Saxo says it’s possible that at least one country could completely cut out meat production.
A nation that “wants to lead others” on its climate credentials could decide to heavily tax meat from 2025 and ban all domestically produced live animal meat entirely by 2030, said Saxo Market Strategist Charu Chanana.
Meat is responsible for 57% of emissions from food production, according to research published by Nature Food.
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“I wouldn’t be surprised to see schools in Denmark and Sweden ban meat altogether, it’s definitely going that way,” Saxo’s Jakobsen told CNBC. “It sounds crazy to us oldies,” he added.
The UK, EU countries, Japan and Canada are among the nations with legally binding net-zero pledges.
Britain’s Department for Environment Food and Rural Agriculture said there were “no plans” to introduce a meat tax or ban meat production when contacted by CNBC.
An eventful 2023?
Some of the other “outrageous predictions” for next year from Saxo include the resignation of French President Emmanuel Macron, Japan pegging the yen to the US dollar at a rate of 200 and the formation of a unified EU military.
However, all predictions should be taken with a grain of salt. Saxo’s Jakobsen told CNBC that there was a 5-10% chance of each forecast coming true.
The bank has made a set of “outrageous predictions” every year for the past decade, and some have actually come true – or at least come close.
In 2015, Saxo predicted that the UK would vote to leave the EU after a landslide in the UK Independence Party, it predicted that Germany would enter a recession in 2019 – which the country narrowly avoided – and it bet that bitcoin would experience a meteoric rally in 2017.