The European Union today warned Britain it was “months” away from being able to negotiate a future trade deal, with huge divisions still remaining between the UK and EU over the so-called Brexit bill.

Michel Barnier, the EU’s chief negotiator, insisted that Britain would have to pay all its share of money earmarked for European funds after Brexit, as the bloc’s own auditors criticised it for running up an “all time high” in spending commitments.

Mr Barnier acknowledged that Mrs May’s Florence speech had created a “new dynamic” in the Brexit negotiation, but warned the two sides remained far apart on key issues. “We have had a constructive week, yes, but we are not yet there,” he said.