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Prime Minister Theresa May might have survived a confidence vote, but this does not yet mean her Brexit deal will get through parliament and Pound Sterling therefore still faces the prospect of a 'no deal' Brexit taking place in March 2019.

As a result, we can report bookmakers are slashing odds that the British Pound will slump to parity against the Euro before the end of 2019.

The switch in favour of bets looking to capitalise on substantial weakness in Sterling over coming days and weeks comes on the day Prime Minister Theresa May is to face a vote of confidence in her leadership at the hands of her parliamentary party ensuring a surge in uncertainty over the Brexit outlook.

Robert Howard, an analyst on the Thomson Reuters currency desk says the exchange rate could fall below 1.10 in the aftermath of May losing the confidence vote, however Howard notes the betting market is expecting declines to extend as such an outcome leads to a 'no deal' Brexit.

Bookmakers Paddy Power are quoting at 6/1 that the Pound-to-Euro exchange rate trades at 1.0 by the time January is upon us, Howard notes this is down from odds of 9/1 seen earlier in the week.

The all-time low for GBP/EUR is seen at 1.0199 according to Reuters data.

Forecasts for the GBP/EUR from 50 of the world's leading institutions however shows that this is not the assumption amongst analysts, with consensus estimates being notably higher; even the lowest forecasts put forward by the analyst community do not envisage such a decline. (Consensus forecast PDF available here).

Yet, analysts are almost in full agreement that a 'no deal' Brexit will be avoided, therefore it could be that should a 'no deal' actually transpire we will see more forecasts for parity in GBP/EUR come forward.

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