Senior British minister Michael Gove put the chances of securing a trade deal with the EU at less than 50 per cent on Thursday, striking a pessimistic tone just two weeks before Britain completes its departure from the world’s largest trading bloc.

His downbeat prediction was in sharp contrast with remarks by the EU’s chief negotiator suggesting there had been good progress, as both sides try to prevent a turbulent finale to four years of tortuous discussions.

Optimism had been rising that a deal was imminent to keep the goods trade that makes up half of annual EU-UK commerce, worth nearly a trillion dollars in all, free of tariffs and quotas beyond December 31.

But both sides say there are gaps to be bridged and it was unclear whether either would shift far enough to open the way for a breakthrough.

British interior minister Priti Patel said the talks had entered the “tunnel” — EU jargon for the final, secretive make-or-break phase, and EU chief negotiator Michel Barnier tweeted: “Good progress, but last stumbling blocks remain.”

But Gove, in charge of implementing an earlier divorce deal, told a parliamentary committee: “I think that regrettably the chances are more likely that we won’t secure an agreement.”

He put the probability at “less than 50 per cent”, adding that, if the British parliament did not have time to pass the deal into law by December 31, “then the clock has run out and no agreement would have been reached and we will be in a world where we will be trading on WTO terms”.

Failure to agree a deal on goods trade would send shockwaves through financial markets, damage the economies of Europe, snarl borders and sow disorder along delicate supply chains that stretch across Europe and beyond.

But traders appeared to take an upbeat view of the prospects for a deal. Shortly afer Gove spoke, sterling was off its highs but still up around 0.5 per cent at $1.3578 against a weaker dollar.

Prime Minister Boris Johnson, the face of the 2016 Brexit referendum campaign, has long said he will not accept a deal that fails to respect British sovereignty after winning an election last year on a pledge to “take back control”.

Gove said some of the remaining differences went “to the very heart of the (government’s) mandate”.

An EU official who declined to be named said disagreements over fisheries were not yet resolved. Two EU diplomats and an EU official said they did not expect a deal to come together by Friday.

Many deadlines have been missed in the talks since Britain left the bloc in January.

The European Parliament said it could hold an emergency plenary in late December should a deal come together by Monday.