The UK and EU finished the latest round of talks about the future trading relationship between the two entities in London last week.

The UKs chief negotiator David Frost said the UK must face the possibility that it will not agree a deal on its future relationship with the EU by the end of the year.

Mr Frost said with less than six months to go until the end of the Brexit transition period, the UK must "continue preparing for all possible scenarios" for once that deadline passes.

He added there are considerable gaps in the contentious areas which include the UKs position on fishing rights and post-Brexit competition rules.

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Both the UK and EU have said they are at a deadlock regarding fishing rights.

Mr Barnier describes as "simply unacceptable" the UK demand for "near-total exclusion of EU fishing vessels from UK waters".

The EU understands the UK wishes to be an independent state, but claims common stocks need to be managed jointly.

Mr Frost has given little indication the UK is ready to give ground on fishing or over competition.

The UK's chief negotiator said his side will continue to strive for a "Canada-style" free trade deal allowing for wide divergence from EU rules, something Brussels negotiators and EU governments have always rejected, especially given Britain's economic clout and geographical proximity to the continent.

Currently, the UK-EU are still very far apart on key issues in the trade talk negotiations.

A senior EU official said the British side had not demonstrated any new flexibility despite what they see as London's weakening position.

The EU official told Politico: They have been very, very slow in reacting and not shown a lot of willingness to move forward.

Ireland, Belgium, Holland will be impacted by Brexit. A part of this Brexit Adjustment Reserve could very well be used to compensate our fishermen.

So you know the Brits might not have expected that, that we would have come up with that, and this budget. For us, it is very important that we prepare for every possible outcome.

The source added the EU is prepared to make a dal, but would not forget the EUs interests.

They said: We would definitely prefer a deal and we are ready to conclude a deal its better for both of us but we are preparing for every scenario.

We're not going to sell Europe just like that.

Our values will remain untouched.

Informal talks continue in the week of July 27 ahead of the next formal round of negotiations from August 17.

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Brexit deal: What is happening in UK-EU trade talks? - Daily Express