December 04
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Saxo Bank's "outrageous predictions" for 2023 include a ban on meat production, skyrocketing gold prices and a British vote to abandon Brexit.

The Danish bank's annual report predicts that the world economy will move into a war economy mode, where sovereign economic gains and self-reliance prevail over globalization.

The forecast, while not reflecting the bank's official view, looks at how policy makers' decisions next year could affect both the global economy and the political agenda.

Among the bank's projections for next year, Saxo's head of commodity strategy Ole Hansen predicted that the price of spot gold could exceed $3,000 an ounce in 2023, about 67% above its current price of about $1,797 an ounce.

The report puts the projected surge down to three factors: a growing war economy mentality that makes gold more attractive than foreign exchange reserves, large investments in new national security priorities and increased global liquidity as policymakers try to avoid debt fiascos.

“I would not be surprised to see commodity driven economies wanting to go to gold because of a lack of better alternatives," Steen Jakobsen, chief investment officer at Saxo, told CNBC’s “Squawk Box Europe.”

Although analysts expect gold prices to rise in 2023, such a sharp jump is unlikely, said CRU, a commodities analysis firm. “Our price expectations are much more moderate,” Kirill Kirilenko, a senior analyst at CRU, told CNBC.

“A less hawkish Fed is likely to lead to a weaker USD, which could in turn give gold bulls more breathing space and energy to stage a rally next year, lifting prices closer to $1,900 per ounce,” he said. However, Kirilenko stressed that everything depends on the Federal Reserve's actions. "Any hint of increasing ‘hawkishness’ from the US central bank would likely pressure gold prices lower,” he said.

According to Saxo's JaKobsen, the "scandalous prediction" that is likely to happen next year 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 finance minister Jeremy Hunt could cut the Conservative Party's ratings to an "unheard-of lows" as their "brutal fiscal programme throws the UK into a crushing recession." This, the bank predicts, could prompt the English and Welsh public to rethink the Brexit vote with younger voters and force Sunak to call a general election.

Amir believes that the opposition Labor Party could win the election and promise to hold a referendum to repeal Brexit on Nov. 1.

Anand Menon, director of the British think tank, said this prediction is just not true. “I don’t think there will be another referendum and the idea that [Labour leader Keir] Starmer would adopt that position is for the birds,” he said.

A YouGov survey conducted in November found that 59% of the 6,174 people surveyed thought Brexit had gone “fairly badly” or “very badly” since the end of 2020, while only 2% said it had gone “very well.”

According to a study published by Nature Food, meat accounts for 57% of emissions from food production, and since countries around the world have committed to zero emissions, Saxo says it's possible that at least one country could eliminate meat production entirely.

According to Saxo market strategist Charu Chanan, one country, eager to get ahead of others in its climate mandate, could decide to impose high taxes on meat starting in 2025, and by 2030 could completely ban all domestically produced animal meat.  “I wouldn’t be surprised to see schools in Denmark and Sweden banning meat altogether, it’s definitely going that way,” Saxo’s Jakobsen told CNBC. “It sounds crazy for us old people,” he added.

The United Kingdom, European Union countries, Japan and Canada are among the countries that have made legally binding commitments to zero emissions.

The U.K. Department of Environment, Food and Rural Affairs said it has no plans to impose a meat tax or ban meat production.

An eventful year in 2023?

Some of Saxo's other predictions for next year include the resignation of French President Emmanuel Macron, the pegging of the Japanese yen to the U.S. dollar at 200 and the formation of a joint European Union military force.

However, all predictions should be treated with a degree of skepticism. Saxo's Jakobsen told CNBC that there is a 5-10% chance that every forecast will come true.

Each year over the past decade, the bank has made a number of "outrageous predictions," and some of them have indeed come true - or at least come close to it.

In 2015, Saxo predicted that Britain would vote to leave the European Union after the United Kingdom Independence Party's convincing defeat, it predicted that Germany would go into recession in 2019, something the country narrowly avoided, and it bet that bitcoin would experience rapid growth in 2017.

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