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

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

The Danish financial institution’s annual report, revealed earlier this month, expects international economies to shift into “struggle financial system” mode, “the place sovereign financial positive aspects and self-reliance trump globalisation.”

The forecasts, whereas not consultant of the financial institution’s official views, checked out how choices from policymakers subsequent yr may influence each the worldwide financial system and the political agenda.

Gold to hit $3,000

Among the many financial institution’s “outrageous” requires subsequent yr, Saxo Head of Commodity Technique Ole Hansen predicted the worth of spot gold may 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 elements: “an rising struggle financial system mentality” that makes gold extra interesting than international reserves, an enormous funding in new nationwide safety priorities, and rising international liquidity as policymakers attempt to keep away from debt debacles of their respective recessions.

“I might not be stunned to see commodity pushed economies desirous to go to gold due to a scarcity of higher options,” Steen Jakobsen, chief funding officer at Saxo, advised CNBC’s “Squawk Field Europe” on Dec. 6.

“I believe gold goes to fly,” he added.

Whereas analysts predict a rise within the value of gold in 2023, a surge of that magnitude is unlikely, in line with international commodities intelligence firm CRU.

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

“A much less hawkish Fed is prone to result in a weaker USD, which may in flip give gold bulls extra respiratory house and vitality to stage a rally subsequent yr, lifting costs nearer to $1,900 per ounce,” he stated. 

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

Britain will vote to un-Brexit

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

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

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

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

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

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

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

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

Starmer advised a enterprise convention in September that his social gathering 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 depart the EU again in 2016.

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

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% stated it had gone “very properly.”

Meat manufacturing to be banned

Meat is accountable for 57% of emissions from meals manufacturing, in line with analysis revealed by Nature Meals, and with international locations internationally having made net-zero commitments, Saxo says it’s potential no less than one nation may lower out meat manufacturing totally.

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

“I would not be stunned to see colleges in Denmark and Sweden banning meat altogether, it is undoubtedly going that approach,” Saxo’s Jakobsen advised CNBC. “It sounds loopy for us outdated folks,” he added.

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

The U.Ok’s Division for Surroundings Meals 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?

Among the different “outrageous predictions” for subsequent yr 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, nevertheless. Saxo’s Jakobsen advised CNBC that there was a 5-10% likelihood 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 no less than come shut.

In 2015, Saxo forecasted that the U.Ok. would vote to depart the European Union following a United Kingdom Independence Get together 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.