Avoiding a no-deal Brexit will "not be easy", Downing Street has said as both sides of talks refuse to compromise.
A post-Brexit trade deal remains possible, Boris Johnson's official spokesman insisted, but he said progress was "very difficult."
But he said there was no possibility of extending the transition period.
Number 10 has previously said talks needed to meaningfully conclude by October - and regardless of the outcome, the transition period will end on December 31.
The spokesman said: "We will continue to work hard to reach an agreement and look forward to the next round (of talks) next week.
"We believe an agreement is still possible and it is still our goal but it is clear that will not be easy to achieve."
Asked if there was any possibility of an extension to the transition period, the spokesman replied: "No."
"I think the EU continues to insist that we must agree on difficult areas in the negotiations, such as EU state aid, before any further work can be done in any other area of the negotiation, including on legal texts... that makes it very difficult to make progress," he said.
"We would instead like to settle the simplest issues first in order to build momentum in the talks as time is short for both sides."
Informal Brexit talks between negotiators David Frost and Michel Barnier are taking place in London on Tuesday, ahead of the eighth round of formal negotiations next week.
