"The end of 2020 seems indeed like a natural point for that implementation period or transition," said Stefaan De Rynck, senior adviser to the European Union's chief Brexit negotiator Michel Barnier.

He said the goal of both sides is to make sure the future relationship is in place in January 2021. He also said that during the transition, new EU rules that come online will need to be applied in the UK.

EU leaders last week signed off on the first stage of Brexit negotiations and talks on a transition period are due to start in January, with Britain hoping for an agreement on the main principles by March.