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Time is running out on Brexit, and the UK should remain in a customs union with the EU, the CBI has warned.

Carolyn Fairbairn, head of the UK business group, said there was a "lack of clarity" surrounding ongoing talks about the future of UK-EU trade.

Speaking on ITV's Peston on Sunday, she also said a customs union would be best for UK economic growth and prosperity.

The UK's Department for Exiting the EU said Brussels had an "ambitious free trade approach" to exit discussions.

"We are confident of negotiating a deep and special economic partnership that includes a good deal for financial services - that will be in the EU's best interests, as well as ours," a spokesman said.

But they added "as the prime minister has already made clear, we will be leaving the single market and the customs union after EU exit day", referring to 29 March 2019.

Being a member of a customs union means that once goods have cleared customs in one country, they can be shipped to others in the union without further tariffs being imposed.

Businesses have been calling for clarity on what a replacement system will involve.

'Frictionless trade'

In a speech at Warwick University on Monday CBI director general Ms Fairbairn will elaborate on her concerns, and say progress is needed on a transitional EU trade deal by April.

She will also say the framework for a future business trading relationship with Europe must be set out by October.

Theresa May has already rejected full membership of the customs union as it could prevent the UK striking its own post-Brexit trade deals.

But Ms Fairbairn will say: "There may come a day when the opportunity to fully set independent trade policies outweighs the value of a customs union with the EU.

"A day when investing time in fast-growing economies elsewhere eclipses the value of frictionless trade in Europe. But that day hasn't yet arrived."

Remaining a member of a customs union "for as long as it serves us to do so is consistent with the result of the referendum and would be good for EU firms too" she will add.

'British business handcuffed'

Ms Fairbairn will set a 70-day deadline for a written agreement on a transitional trade deal between the UK and EU.

"Decisions must be taken fast, or firms will have no choice but to trigger their plan Bs," she will warn.

"More jobs and investment will leave our shores and future generations will pay the price."

But Richard Tice, Co-Chair of campaign group Leave Means Leave said: "Only by leaving the customs union can the UK forge new independent trade deals with the rest of the world. Remaining in a customs union with the EU will eliminate major economic benefits of Brexit.

"Remaining in a customs union will handcuff all of British businesses to bureaucratic EU red tape even though approximately 90% do not trade with the EU. This is one of the major benefits of leaving."