The EU’s chief Brexit negotiator has said talks with the UK over its exit bill have hit a “deadlock” and he will not tell EU leaders that “sufficient progress” has been made to accelerate talks from divorce to trade negotiations next week.

Speaking at the conclusion of the fifth round of formal Brexit talks, Michel Barnier said the question of the financial settlement were confined to “technical” discussions this week rather than the bigger issue of what EU budget commitments the UK would pay for.

“We’ve reached a state of deadlock which is very disturbing. We are not asking the UK to make concessions”, said Mr Barnier. “With political will, decisive progress is within our grasp within the next two months” he said.

“With the necessary will and on the basis of the commitments entered into by Theresa May, we can get out of this deadlock”, added Mr Barnier.

At the press conference, David Davis, the UK’s Brexit secretary, said the technical talks over the bill were “rigorous” and designed ensure a political agreement over the settlement can be reached later on.

When asked about the possibility of a “no deal”, Mr Davis said the UK was aiming for an agreement but the “government has to be ready for the alternatives. The UK is planning for all outcomes…however improbable. Wherever money needs to be spent it will be spent.”

Mr Barnier said a “no deal would be a very bad deal” for Britain.

EU leaders, including Ms May, will meet for a key leaders summit in Brussels next week. Although hopes of “sufficient progress” have been dashed, Donald Tusk, EU council president, has touted December as a likely point where European leaders will ask Mr Barnier to move talks to the UK’s future relationship with the EU.

The UK also wants EU leaders to give Mr Barnier a wider mandate to begin talks over a transition period at the October summit. But the Frenchman said on Thursday he was only willing to discuss a wider mandate “at an appropriate time”. “Now is not that time”.

Brexit negotiations this week have centered on the rights of citizens – including the exportation of benefits for EU citizens and the rights to bring over future family members to the UK. On Ireland, Mr Davis said the UK would move “heaven and earth” to reach a deal on the northern Irish border.

One official involved in the Brexit talks told the FT the week’s negotiations had made “zero progress”.

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