The EU earlier announced that it had launched legal action against the UK, in the wake of London’s plans to pass a controversial bill that would override parts of the bilateral Brexit agreement.

Goldman Sachs has said that the UK and the European Union could possibly reach a post-Brexit trade deal by early November, but that the risk of a failure in negotiations cannot be ruled out.

"Our core view remains that a ‘thin’ zero-tariff/zero-quota trade agreement will likely be struck by early November, and subsequently ratified by the end of December”, Goldman analysts said.

"The risk of a breakdown in negotiations cannot be ruled out”, analysts added. "We continue to think the perceived probability of 'no deal' will persist beyond the next European Council meeting in mid-October”.

UK Prime Minister Boris Johnson said on Sunday that the United Kingdom “can prosper mightily” in the event current post-Brexit trade negotiations with the European Union end without a deal once the transition period expires on 31 December.

Last month, London refused to withdraw the Internal Market Deal, which is changing Brexit rules. 

In turn, European Commission President Ursula von der Leyen announced that the EU was taking the first step in an infringement procedure against the UK.

The Internal Market Bill is designed to give Westminster more power over devolved areas, including Northern Ireland in the EU's Customs Union in order to prevent a hard border on the island of Ireland.

The UK left the EU in January but remains under the current EU trade terms. However, if no trade deal is secured before the so-called transition period expires on 31 December, the World Trade Organisation's rules for both parties will come into effect starting 2021, including customs tariffs and full border checks for UK goods entering the EU.