Britain is seeking to outlaw any extension to the Brexit transition period beyond 2020, the government said on Monday, sinking the pound and leaving Brussels fearing a race against the clock to strike a new trade deal.
Prime Minister Boris Johnson won a big majority in Thursday's general election on a promise to "get Brexit done" by taking Britain out of the European Union by January 31.
An 11-month transition period will then follow, during which London and Brussels hope to negotiate a trade agreement before the end of December next year.
Britain's Prime Minister Boris Johnson addressing supporters before last week's election. Source: AAP
Mr Johnson pledged to work "24-hours-a-day, flat out" to deliver on his election promises.
The EU's chief Brexit negotiator Michel Barnier said the bloc would do its utmost to meet the tight deadline.
"We will do the maximum," he told reporters when asked if he could meet the deadline to seal the trade agreement and avoid a no-deal divorce that could punish the economy.
Separately, European Commission Vice President Valdis Dombrovskis warned the deadline was "going to be very limited" to forge an ambitious deal.
"It will be indeed rather problematic to hold negotiations and reach agreement on a comprehensive trade deal," he added, complaining that a "very rigid time-frame... reflects that certain things will be out of reach".
'You ain't seen nothing yet'
The pound rose against the dollar and euro after Johnson's decisive re-election, bringing certainty that Britain would leave the EU by the end of January.
But those gains were lost Tuesday on fears of a "no-deal" outcome that could cause fresh uncertainty and chaos.
The pound sank by 1.4 per cent against the dollar.
Prime Minister Boris Johnson holds his first Cabinet meeting following the election. Source: Press Association
Mr Johnson held his first cabinet meeting since the election on Tuesday, welcoming back his ministers after what he called a "seismic" result, telling them: "You ain't seen nothing yet."
As the House of Commons returned, he told MPs: "This parliament is not going to waste the time of the nation in deadlock, and division and delay.
"We are going to get Brexit done... and we are going to get on with delivering on the priorities of the British people... after three and a half years of wrangling."
'Bloody difficult'
Parliament began swearing in MPs on Tuesday.
Queen Elizabeth II sets out the government's legislative programme on Thursday and Mr Johnson plans to put the EU Withdrawal Agreement Bill before lawmakers on Friday.
The government is planning to block the transition period from going beyond the end of 2020, in a symbolic statement of intent.
"We will not extend the implementation period and the new Withdrawal Agreement Bill will legally prohibit government agreeing to any extension," a Downing Street source said.
Mr Johnson spoke on the phone with new European Commission President Ursula von der Leyen and the pair agreed to start trade talks as soon as possible, London and Brussels said.
"We agreed to launch negotiations ASAP on future EU-UK partnership. We will meet at the beginning of 2020. The UK will always be a friend, partner and ally," Ms von der Leyen tweeted.
Mr Johnson's spokesman added: "Now, with absolute clarity on the timetable we're working to, the UK and the EU will be able to get on with it and have a great future relationship wrapped up by December 2020."
The spokesman confirmed Britain was still targeting a "Canada-style" free trade agreement.
A senior European diplomat in Brussels said: "It will be bloody difficult to get a deal done and ratified in 11 months' time.
Ursula von der Leyen. Source: AAP
"If the UK limited its options prematurely and in consequence sleepwalked into a no-deal nobody wants at the end of 2020, the EU would be well prepared and ready to mitigate the effects on its member states."
The Confederation of British Industry (CBI) business lobby said there was no time to lose in striking a good trade deal as quickly as possible.
"Business has had enough of uncertainty and shares the prime minister's ambition for a fast EU trade deal," said CBI director-general Carolyn Fairbairn.
