Johnson says that chances of reaching trade deal with EU are 'very good'

Prime Minister Boris Johnson sounded a confident note on the ability of Brussels and Westminster to clinch a trade deal.

"I don't think we are actually that far apart -- what we need to see now is a bit of oomph in the negotiations," Johnson said, according to Bloomberg.

"The faster we can do this the better: we see no reason why you shouldn’t get that done in July.”

Johnson was speaking following an hour-long call with the heads of the European Commission, the parliament in Strasbourg and of the EU Council.

He reportedly added that the chances of reaching an agreement are "very good" and people from both sides agreed that fresh momentum had been injected into the talks, Bloomberg reported.

Indeed, the programmed pace of talks was set to intensify over the six weeks starting from 29 June.

Yet as of 2125 BST, the pound was almost unchanged against the euro at 1.1129, although it had come off its earlier lows.

And differences remained.

Council President, Charles Michel, warned on Twitter that the bloc would not be rushed and that respect of the so-called 'level playing field' would be essential for any agreement.

That would bind the UK to certain EU ruled regarding state aid and the environment.

There were also differences around fishing rights, security relations and the European Court of Justice's involvement in settling disputes with the latter another of Brussels's key demands.

However, the two sides did agree on Monday's call to "if possible, finding an early understanding on the principles underlying any agreement," which Bloomberg took to mean the EU was responding to pressure from Westminster.

The PM did say nonetheless that he did not want talks "going on until the autumn, winter, as perhaps some in Brussels would like".

In private however, Bloomberg said officials from both sides were aiming for a deal in mid-August and an EU leaders summit in mid-October.

For their part, the EU inferred the PM was also willing to soften his own position and no hard deadline for talks to end was set out by the UK.

A person familiar with the conversation also reportedly said Johnson had conveyed the UK's commitment to the terms of the Brexit Political Declaration.

Commenting on the most likely endgame for talks, Ruth Gregory at Capital Economics said: "This would involve a slim trade in goods deal, while the status quo is maintained on many other issues, such as services and financial services, until deals in those areas can be sorted after 2020.

"Or this may mean that the negotiations are concluded this year, but time is set aside to implement the deal – an extension of the transition period in all but name."

Regarding the impact of any deal, Gregory said: "Even if there is a deal, there may be some disruption at the turn of the year. And if there is a no deal, then Brexit will act as a bigger drag on economic growth.

"So whether a deal is agreed or not, Brexit will probably prove a further hurdle in the UK’s long road to recovery."

Should a deal finally be struck, Gregory expected sterling to advance from 1.25 against the US dollar to 1.35 with the hit to Britain's gross domestic of between 0.0-1.0%, with the exact figure dependent on the extent of any agreement.