The UK and the EU have said they have some way to go to reach a post-Brexit trade deal following recent talks in London.
David Frost, the UK's chief negotiator, said there were "significant gaps" in the most difficult areas, but a deal could still be reached in September.
His EU counterpart, Michel Barner, said the two sides were still "far away" and that time was running out for talks.
The UK has refused to extend the December deadline for reaching a deal.
This was the second official round of face-to-face talks since the coronavirus crisis after the two sides agreed to intensify discussions in June.
The two sides' key negotiators are due to meet informally in London next week, while a second round of official talks will be held in Brussels in mid-August.
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Speaking after the talks, Mr Barnier said the deal was "not possible at the moment" unless the UK changed its stance on fisheries and post-Brexit rules to competition.
He said the UK had not shown "readiness to break deadlocks" in these areas, and that "response time is running out fast".
He told reporters there was no risk of a deal being struck unless the UK changed course on issues that were "at the heart" of EU trade interests.
He added that an agreement would be needed "recently" by October to ratify the current post-Brexit transition period before it expires in December.
'Practical Approach'
In a statement, Mr Frost said the rules of fisheries and competition - known as the "level playing field" provisions - had been "the most difficult field".
And he also said that the government "must face the possibility" that the deal will not happen.
But he added that the EU had shown a "pragmatic approach" to British demands to limit the role of the European Court of Justice after the transition period ended.
Mr Frost said the UK, which has so far emphasized a range of different deals in a variety of areas, was also ready to consider a "simple" framework for the deal.
He acknowledged, however, that the UK's earlier demands would not lead to an "early understanding" of the terms of the deal by this month.
He said the EU's offer to break the deadlock had so far failed to honor "basic principles that we have repeatedly clarified".
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