Boris Johnson and EU chief Ursula von der Leyen will hold last minute Brexit talks today as the two sides try to salvage a last minute trade deal.
The two have agreed to meet ahead of an EU summit on 15 October, with Johnson saying last week that he needs to see a deal is possible by this point or he will walk away from negotiations.
The deadline for talks is currently the end of this month, with both sides saying businesses need time to prepare for the UK’s exit from the EU single market and customs union on 31 December.
German chancellor Angela Merkel warned the EU today that it should be prepared for a potential no-deal scenario next year.
“Unfortunately we have to prepare for the event there will be no agreement,” she said.
“We also have to take into account the reality – an agreement has to be in the interests of both parties, in British interests as well as the interests of the 27 member European Union.”
Chief UK negotiator Lord David Frost is currently in the middle of intensive negotiations with his EU counterpart Michel Barnier.
The two largest barriers to a deal have been disagreements over state subsidy regulations – as a part of the wider level playing field talks – and EU access to UK fishing waters.
Frost said last week that fisheries policy remained the biggest barrier to a deal, but that discussions on state subsidy regulation had begun to slowly progress.
Brussels’ starting position was to demand the EU retains the same access it had to UK fishing waters as when Britain was still a member state – a position that Frost has repeatedly said is unacceptable.
The UK is looking to completely renegotiate and give the EU a far smaller quota of fish in its waters.
Next year will also see changes to border arrangements at UK ports, particularly Dover.
Lorry drivers entering Kent will need specialised “access permits” to ensure they have the right paperwork to enter the EU.
The Cabinet Office has warned that 7,000-long queues of lorries could form next year if not enough businesses are ready for the incoming changes.
Cabinet Office minister Lord Theodore Agnew said today that businesses had “their heads in the sand” about the changes and needed to do more to prepare.
The comments drew fury from the Road Haulage Association trade body, who said the government had not provided businesses with enough information about future changes.
RHA chief executive Richard Burnett said: “Since the original vote to leave the EU was taken four years ago the RHA has been working tirelessly to establish how future processes and systems will work.
“But we are still in the dark and very little useful information has been forthcoming.
“With 11 weeks to go until the transition period ends, government are still saying ‘let’s wait and see what deal we get’ – this is creating even more confusion.”