Michel Barnier, the EU's chief Brexit negotiator, has told MEPs there has not been enough progress made in negotiations with the UK over its withdrawal from the bloc.
Speaking at a news conference held jointly with the UK's secretary for exiting the European Union, David Davis, Barnier also said "serious divergences" persist, including with regard to the divorce bill.
“We have not yet achieved sufficient progress to undertake in full confidence the second phase of negotiations,” he said.
Barnier said Prime Minister Theresa May's recent speech in Florence, in which she proposed a transition period during the Brexit process, "gave us some openings", but added that talks had not reached a point where the UK and EU could begin discussing exactly how this transition phase would operate.
The two chief negotiators have been in a stalemate for weeks. In August, arguments between the British and EU teams came to light, with Barnier stating that no decisive progress had been made in the first round of talks, while Davis maintained this wasn't the case.
And the standoff between Barnier and Davis has already caused alarm in the City, with companies worried that failure to make sufficient progress in the early stages of Brexit negotitions will lead to a delay in beginning trade talks.