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

Meat bans, soaring gold prices and Britain’s vote to “repeal Brexit” could be in for 2023, according to Saxo’s outrageous predictions.

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

The Danish bank’s annual report, published earlier this month, expects global economies to shift into a “war economy” mode, “where sovereign economic profits and self-sufficiency overtake globalization.”

The forecasts, while not representing the bank’s official views, focused on how politicians’ decisions in the coming year could affect both the global economy and the political agenda.

Gold will reach $3000

Among the bank’s “outrageous” calls for next year, Saxo’s head of commodity strategy Ole Hansen predicted spot gold could top $3,000 an ounce in 2023 – around 67% higher than its current price of around $1,797 an ounce .

The report attributes its predicted surge to three factors: a “growing war economy mentality” that makes gold more attractive than foreign reserves, heavy investment in new national security priorities and increasing global liquidity as policymakers try to avoid debt debacles in their respective countries . recession.

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

“I think gold will fly,” he added.

While analysts expect the price of gold to rise in 2023, an increase of this magnitude is unlikely, according to global commodity intelligence firm CRU.

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

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“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 rally next year, pushing prices closer to $1,900 an ounce,” he said.

However, Kirilenko emphasized that everything depends on the actions of the Federal Reserve System. “Any hint of a more hawkish move by the US central bank would likely push gold prices lower,” he said.

Britain will vote to cancel Brexit

The “outrageous prediction” most likely to happen next year, according to Saxo’s Jakobsen, is that there will be another Brexit referendum.

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

Saxo market strategist Jessica Amir said British Prime Minister Rishi Sunak and his Chancellor of the Exchequer, Jeremy Hunt, could see the Conservative Party’s ratings hit “unheard of lows” as their “brutal fiscal program plunged the UK into a crushing recession”.

The bank predicted this could prompt the English and Welsh public to rethink the Brexit vote with younger voters leading the way and force Sunak to call a general election.

Saxo predicts there could be another Brexit referendum for Britain.

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Saxo’s Amir said the opposition Labor party could then win the election and promise a Brexit reversal referendum on November 1, winning the “re-union” vote.

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“Traders say the only thing they got 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 Changing Europe, said the prediction “just doesn’t add up”.

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

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

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Public sentiment on Brexit had changed since the referendum, Menon said, after the vote resulted in a narrow majority of 52% of voters opting to leave the EU in 2016.

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

Research by YouGov in November found that 59% of 6,174 people polled thought Brexit had gone “quite badly” or “very badly” since the end of 2020, while just 2% said it had gone “very well”.

Meat production will be prohibited

Meat is responsible for 57% of emissions from food production, according to research published by Nature Food, and with countries around the world making zero commitments, Saxo says it’s possible that at least one country could stop meat production altogether.

One nation “seeking to prioritize others” on its climate credentials may decide to heavily tax meat from 2025 and could completely ban all domestic live meat from animals by 2030, Saxo market strategist Charu Chanana said.

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According to research published by Nature Food, meat is responsible for 57% of emissions from food production.

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“I wouldn’t be surprised if schools in Denmark and Sweden completely ban meat, that’s definitely the case,” Saxo’s Jakobsen told CNBC. “It sounds crazy to us oldies,” he added.

The United Kingdom, European Union countries, Japan and Canada are among the countries with legally binding zero net worth pledges.

Britain’s Department for Environment, Food and Rural Affairs said there were “no plans” to introduce a meat tax or ban meat production after being contacted by CNBC.

Busy year 2023?

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

However, all predictions should be taken with a pinch of salt. Sax’s Jakobsen told CNBC that there is a 5-10% chance that each prediction will come 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 European Union following the collapse of the UK Independence Party, predicted that Germany would enter recession in 2019 – which the country narrowly avoided – and bet that bitcoin would experience a 2019 Meteor Rally. 2017.

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