Business secretary Alok Sharma said the EU and UK “have made progress” on a post-Brexit trade deal, amid chatter that an agreement could be reached next week.
Sharma insisted that businesses must prepare themselves for big changes when the transition period ends in December even if a deal is struck, however.
His comments come as the UK and EU are locked in key negotiations to thrash out an agreement before the Brexit transition period expires on 31 December.
Yesterday, UK Brexit negotiator David Frost reportedly said a trade deal could be struck as early as next week. Number 10 yesterday said that it hopes for a breakthrough next week.
Both sides have said major parts of the deal are already complete. But they remain unable to agree on fishing rights and state aid rules, which try to limit countries undercutting each other economically.
EU negotiators are reportedly planning to provide envoys of the bloc’s 27 member states with an update on the trade talks on Friday morning.
Sharma told Sky News today: “We have made progress but there is still some way to go.” In a sign of remaining tensions, he said the EU must understand “that the UK is a sovereign nation”.
“The key point though for businesses… is that whatever type of deal we exit on or we leave the transition period on, change is coming, so businesses do need to prepare in terms of customs arrangements.”