Boris Johnson has doubled down on negotiations with the EU over the post-Brexit trade deal stating that failing to reach a post-Brexit trade deal with the European Union should hold “no fear” for the UK.

The Prime Minister, who had earmarked Thursday’s summit of European Union leaders as the date to get a deal done, told the Cabinet that the talks were at a crucial stage.

Meanwhile, a minister accused businesses of adopting a “head-in-the-sand approach” ahead of the UK’s exit from the single market and customs union at the end of the year.

READ MORE: Brexit trade talks: When is the deadline? Is a No-deal Brexit likely and what happens next?

The Prime Minister told Cabinet that he still believes a trade deal can be done, his official spokesman said.

“The PM reiterated that, while we want a deal on the right terms, if we can’t get there we are ready and willing to move forward with an Australian-style outcome, which holds no fear,” the spokesman said.

Australia has no comprehensive trade deal with the EU, but also does far less business with the bloc than the UK.

Michel Barnier, the EU’s lead negotiator, updated ministers from the 27 member states at a meeting in Luxembourg ahead of this week’s European Council summit.

Michael Roth, Germany’s Europe minister, suggested the UK would have to give further ground on fishing rights, “level playing field” arrangements such as state subsidies, and the way any deal would be governed.

Following the General Affairs Council (GAC) meeting, Mr Roth said: “We will see in the next few days whether a positive outcome can be achieved, or whether we have to intensify our preparations for a scenario without an agreement.

“And let me be very clear – and this is also a message to our British friends – no-one should play down the risks of a no-deal. This would be very bad news for everyone, for the EU and even more so for the United Kingdom. In the midst of the most serious economic downturn in decades, it would inflict our citizens yet another serious economic setback.”

Mr Johnson will speak to European Commission president Ursula von der Leyen on Wednesday ahead of the leaders’ summit.

Ireland’s foreign minister Simon Coveney said he did not expect the European Council to result in “any major breakthrough” and warned that Mr Johnson’s controversial plan to tear up parts of the Brexit divorce deal and break international law would have to be abandoned if a deal is to command support among the EU’s leaders.

Mr Barnier suggested that talks would go on beyond Mr Johnson’s October 15 deadline.

“The EU will continue to work for a fair deal in the coming days and weeks,” he said.

Lord Frost, Mr Johnson’s Europe adviser, will be taking part in negotiations in Brussels until the eve of the summit.

European Commission vice-president Maros Sefcovic, who has been leading talks with Michael Gove on the implementation of the Brexit divorce deal, said: “EU unity is solid. We continue: full attention, full speed in this final stage.”

In the UK, Government minister Lord Agnew warned that businesses were not ready for the changes that will come in on January 1 when the country leaves the single market and customs union.

He told the Treasury Select Committee: “There’s been a head-in-the-sand approach by traders which has been compounded by what I would call the quadruple-whammy of two false alarms – two extensions at the very last minute – then followed by Covid and now followed by the recession.

READ MORE: EU prepared for worst-case scenario of no deal with UK – German minister

“The traders are not as ready as they should be.”

The comments prompted a backlash from business groups.

Confederation of British Industry deputy director-general Josh Hardie said: “Businesses are doing all they can to prepare for Brexit. But firms face a hat-trick of unprecedented challenges: rebuilding from the first wave of Covid-19, dealing with the resurgence of the virus and uncertainty over the UK’s trading relationship with the EU.

“More than three-quarters of businesses want a deal that will support people’s jobs and livelihoods amid these incredibly uncertain times.

“The best way to help preparations is to agree a deal in the coming weeks.”

Logistics UK policy director Elizabeth de Jong said: “Instead of spending the next 11 weeks before the end of the transition period debating who and what is or isn’t ready, Logistics UK is proactively working with Government on a series of metrics to assess readiness, so that Government and industry can be as confident as possible that all is on track for a smooth transition to a new trading arrangement with the EU.

“Despite the challenges our members are facing to cope with the Covid-19 pandemic and the festive season, traditionally our busiest time of year, we stand ready to help keep Britain trading as we always do.”

Bank of England governor Andrew Bailey said a post-Brexit trade deal would be the “best outcome” for all sides.

He told the Lords Economic Affairs Committee on Tuesday afternoon: “I do think for all parties involved in this process that a trade agreement is the best outcome.”