Extension to Brexit talks welcomed amid frustration as Boris Johnson clings to hope of EU trade deal

Following talks between the Prime Minister and European Commission president Ursula von der Leyen, the negotiations will continue, with both leaders agreeing to “go the extra mile” in search of a deal.

Mr Johnson said the UK would not be walking away from the negotiating table and “where there is life, there is hope” but a no-deal outcome was still the most likely scenario.

He said the UK should get ready for the breakdown of talks, resulting in tariffs under World Trade Organisation (WTO) terms from January 1.

“The most likely thing now is, of course, that we have to get ready for WTO terms, Australia terms,” the Prime Minister said. But it comes after Australia’s former prime minister, Malcolm Turnbull, said his country “wouldn’t regard our trade relationship with Europe as a satisfactory one,” warning the UK to “be careful what you wish for”.

Shadow Business Secretary Ed Miliband, the Doncaster North MP, yesterday warned that leaving the EU without a free trade agreement would be “a disastrous outcome” and a “disgrace”, and accused the Prime Minister of being “cavalier” with the country’s national interests.

He said Mr Johnson was “playing Russian roulette with the jobs and livelihoods of people up and down the country”.

Mr Johnson spoke to Mrs von der Leyen for around 20 minutes in a call described by sources as “perfectly cordial”.

The pair agreed to “keep going for as long as they still think a deal is possible”, a source said.

A joint statement issued by the two leaders said: “Our negotiating teams have been working day and night over recent days. And despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over we think it is responsible at this point to go the extra mile.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “We welcome the commitment from both sides to continue talking and find a way through the political impasse - we now need negotiators to finish the job and agree the deal we all so desperately need, without further delay.”

Confederation of British Industry director general Tony Danker said “a deal is both essential and possible” but “ongoing delays are frustrating and cost businesses”.

British Chambers of Commerce director-general Adam Marshall said it has been a “very frustrating time” but “if a few more hours or days makes the difference, keep going”.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The 11th hour has passed and every passing moment of uncertainty makes it harder for businesses to prepare effectively for January 1.”

Following his talks with Mrs von der Leyen the Prime Minister updated the Cabinet.

Mr Johnson then told reporters: “We’re going to continue to try and we’re going to try with all our hearts and be as creative as we possibly can, but what we can’t do is compromise on that fundamental nature of what Brexit is all about which is us being able to control our laws, control our fisheries, it’s very, very simple. I think our friends get it, and we remain willing to talk and will continue to do so.

"But in the meantime let’s get ready for the WTO option, and that’s what I told the Cabinet.”

A no-deal outcome would cause further damage to an economy already ravaged by coronavirus. Analysts have suggested around £45 billion could be wiped off the value of the UK’s economy in 2021.