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

Saxo Financial institution’s “outrageous predictions” for 2023 embrace a ban on meat manufacturing, skyrocketing gold costs and Britain voting to “un-Brexit.”

The Danish financial institution’s annual report, printed earlier this month, expects world economies to shift into “warfare economic system” mode, “the place sovereign financial beneficial properties and self-reliance trump globalisation.”

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

Gold to hit $3,000

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

The report places its forecasted surge down to 3 components: “an growing warfare economic system mentality” that makes gold extra interesting than overseas 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’d not be shocked to see commodity pushed economies eager to go to gold due to an absence of higher alternate options,” Steen Jakobsen, chief funding officer at Saxo, advised CNBC’s “Squawk Field Europe” on Dec. 6.

“I feel gold goes to fly,” he added.

Whereas analysts expect a rise within the value of gold in 2023, a surge of that magnitude is unlikely, in keeping with world commodities intelligence firm CRU.

“Our value expectations are way more reasonable,” Kirill Kirilenko, a senior analyst at CRU, advised CNBC.

“A much less hawkish Fed is more likely to result in a weaker USD, which might in flip give gold bulls extra respiration house and power to stage a rally subsequent 12 months, lifting costs nearer to $1,900 per ounce,” he mentioned. 

Kirilenko highlighted, nonetheless, that it is all depending on strikes by the Federal Reserve. “Any trace of accelerating ‘hawkishness’ from the US central financial institution would probably strain gold costs decrease,” he mentioned.

Britain will vote to un-Brexit

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

“I truly assume it is one of many issues that can have a excessive chance,” he advised CNBC.

Saxo Market Strategist Jessica Amir mentioned British Prime Minister Rishi Sunak and his Finance Minister Jeremy Hunt might take Conservative Social gathering rankings to “unheard-of lows” as their “brutal fiscal programme throws the UK right 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 power Sunak to name a common election.

Saxo’s Amir mentioned 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.

“Enterprise individuals are saying the one factor they’ve gained from Brexit is U.Okay-specific GDPR,” Saxo’s Jakobsen advised CNBC. “The remaining is simply elevated crimson tape,” he mentioned.

Anand Menon, director of the assume tank UK in a altering Europe, mentioned this prediction “simply does not compute.”

“I do not assume there will probably be one other referendum and the concept that [Labour leader Keir] Starmer would undertake that place is for the birds,” he mentioned.

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

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

“It is completely the case that public opinion appears to be turning,” he mentioned. 

Analysis carried out by YouGov in November confirmed 59% of the 6,174 folks surveyed thought Brexit had gone “pretty badly” or “very badly” because the finish of 2020, whereas solely 2% mentioned it had gone “very nicely.”

Meat manufacturing to be banned

Meat is accountable for 57% of emissions from meals manufacturing, in keeping with analysis printed by Nature Meals, and with nations the world over having made net-zero commitments, Saxo says it’s potential not less than one nation might lower out meat manufacturing fully.

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

“I would not be shocked to see faculties in Denmark and Sweden banning meat altogether, it is positively going that approach,” Saxo’s Jakobsen advised CNBC. “It sounds loopy for us outdated folks,” 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.Okay’s Division for Setting Meals and Rural Agriculture mentioned there have been “no plans” to introduce a meat tax or ban meat manufacturing when contacted by CNBC.

An eventful 2023?

Among the different “outrageous predictions” for subsequent 12 months from Saxo embrace the resignation of French President Emmanuel Macron, Japan pegging the yen to the U.S. greenback at a charge of 200 and the formation of a united European Union army.

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

The financial institution has made a set of “outrageous predictions” every year for the final decade and a few have truly come true — or not less than come shut.

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