A British Union flag, also known as a Union Jack, flies beside European Union (EU) flags as pedestrians walk outside the Houses of Parliament in London, UK, on March 27, 2019. (CHRIS RATCLIFFE/BLOOMBERG)

Trade talks between the UK and European Union are set to be extended beyond this weekend’s informal deadline and continue in Brussels next week, according to two people familiar with the matter.

Negotiators have been working round the clock in London since Monday, with both sides pinpointing the end of this week as the last moment they could strike a deal while still allowing enough time for parliamentary ratification before the UK leaves the bloc’s single market on Dec 31.

Negotiators have been working round the clock in London since Monday, with both sides pinpointing the end of this week as the last moment they could strike a deal

While the talks haven’t reached a conclusion, officials think there’s enough progress to warrant carrying on. They will probably resume in Brussels, the people said, speaking on condition on anonymity because of the sensitivity of the matter.

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A knee-jerk reaction in the currency market reversed sterling’s advance against the dollar. While the pound has since curbed its decline, it’s down 0.1 percent on the day. Still, the options market suggests there’s optimism over the pound’s trajectory, at least in the short term, and FTSE 100 Index is outperforming its European peers.

One of the people warned there were now only a few days left to reach an agreement and pointed to a videoconference of the EU’s 27 leaders on Nov 19 as a possible deadline. That would allow them to approve any deal on the call.

Officials close to the talks said that negotiators are making progress this week and the extension into next week should be seen as a signal both sides believe an agreement is in sight.

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Time is tight because the UK and European parliaments need to ratify any agreement before the end of the year. While this could be done in a matter of days in the British parliament, the EU side needs longer. European lawmakers want the text to scrutinize in committees before a vote in their last plenary session, which begins on Dec 14.

On Saturday, UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen said after a phone call that large differences -- notably on access to British fishing waters and the level playing field for business -- still need to be bridged if there is to be an agreement.

Both sides said they were redoubling their efforts this week.

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