The EU's chief negotiator Michel Barnier said that Britain was not showing a ‘due level of engagement’ in the Brexit talks.
Michel Barnier added that an EU-UK trade agreement was unlikely at this point.
"By its current refusal to commit to conditions to open and fair competition, and to a balanced agreement on fisheries, the UK makes the trade agreement at this point unlikely," he said.
In turn, British Brexit negotiator David Frost said that considerable gaps remain in the most difficult areas, that is, the so-called level playing field and on fisheries, but Britain can still reach an agreement with the European Union in September.
"Despite all the difficulties, on the basis of the work we have done in July, my assessment is that agreement can still be reached in September, and that we should continue to negotiate with this aim in mind," Frost said.
He added that it was clear that London's aim of striking a preliminary deal on the UK's exit from the EU will not be reached in July.
"It is unfortunately clear that we will not reach in July the 'early understanding on the principles underlying any agreement'," David Frost said.
Frost said that going to work very energetically to try to reach an agreement.
"Obviously we must prepare for every outcome and it is possible that we won't reach an agreement, but we're going to work very energetically to try to do so," he said.
The United Kingdom is set to finally exit the bloc's trade and customs regulations on 31 December. Uncertainty yet remains, given the limited progress made between London and Brussels in concluding a comprehensive trade deal, with both sides now appearing to be set on keeping the December deadline regardless of the eventual outcome of the talks.