The U.K. and EU are gearing up for what could be the busiest week in British politics since the referendum in June 2016, as both sides try to thrash out a last-minute deal.
It's been over three years since a majority of the U.K. voted to leave the EU but a withdrawal agreement has proved elusive with various competing interests, logistics and visions of a potential post-Brexit relationship between the U.K. and EU.
This week is seen as the last in which a deal can be struck ahead of a two-day EU summit starting on Thursday October 17.
If no deal is agreed by October 19, the U.K. Prime Minister Boris Johnson is legally bound to ask the EU for a delay to the departure date (October 31) although he is very reluctant to do so.
Talks last week were meant to be the last chance for an agreement to be struck but EU negotiators are reportedly willing to keep talking until Wednesday, the eve of the EU summit, the BBC reported.
The U.K. Parliament is ready to meet on Saturday and vote on a Brexit deal if an agreement can be reached at the summit. It will be the first time Parliament has convened on a Saturday since 1982, amid the Falklands War.
Nonetheless, that all depends on the last-ditch talks to get over the largest stumbling block to a Brexit deal — namely the Irish "backstop" issue — an insurance policy to ensure there is no hard border on the island of Ireland in the event of no post-Brexit trade deal.
'Technical talks'
Current discussions between the EU and U.K. are centered on "technical talks" following proposals from Johnson's government aimed at replacing the Irish backstop.
The U.K. had proposed that Northern Ireland remain a part of the EU single market but left the customs union, resulting in the need for customs checks.
In order to avoid physical infrastructure at the border, the U.K. suggested that checks on goods passing between the Republic of Ireland and Northern Ireland (which is a part of the U.K. and would, post-Brexit, be the U.K.'s only land border with the EU) would take place away from the border.
The EU received the proposals with caution, however, and there are reportedly concerns over the legality and technicalities of customs arrangements in the British proposals.
The European Commission said in a statement Sunday that "a lot of work remains to be done" and that discussions at a technical level would continue Monday. The EU's chief Brexit negotiator Michel Barnier is due to brief EU ministers on the progress of talks on Tuesday.
Experts say it's likely that a deal, in time, remains unlikely.
"Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. In addition, the EU may need a technical extension to ratify the deal on its side anyway," Holger Schmieding and Kallum Pickering, Berenberg Bank's chief economist and senior U.K. economist, said in a note Monday.
"At this stage, our base case remains that a deal won't be finalized in the next few days and that the U.K. will have to ask for a Brexit extension beyond 31 October," they added.
Market moves
Sterling was trading 0.5% lower against the dollar Monday, at $1.2569, and London's FTSE 100 index was also trading 0.4% lower. Ben Gutteridge, head of fund research at Brewin Dolphin, told CNBC that a deal would boost the market exponentially.
"If we get a deal this week those animal spirits will be unleashed and the FTSE and the pound will be off to the races," he told CNBC's "Squawk Box Europe." "But no doubt you have some concern that that won't play out and we have some concern that that may not play out. There are some pretty clear obstacles to getting that deal done this week," he said.
Meanwhile, the U.K. is gearing up for a day of pomp and pageantry when Parliament is due to re-open for a new parliamentary session on Monday. The government's legislative agenda will be outlined in a speech delivered by Queen Elizabeth II, known as the "Queen's Speech."