Britain needs to show “more clarity and less ambiguity” in Brexit negotiations, a French government minister has said, warning that the consequences of failure to reach a deal would be felt across Europe but “even worse in Britain”.

Benjamin Griveaux, a junior economy minister and a member of Emmanuel Macron’s inner circle who helped launch his political movement, La République En Marche, said the current uncertainty was not good for business on either side of the Channel.

“This is not a question of punishing the UK, we have to respect the popular vote, it is the base of our democratic construction in Europe,” he said. “But we need more clarity … It is difficult to negotiate when [the other side’s] positions are changing.”

Speaking in London, where he was meeting representatives of financial services firms that France hopes to lure to Paris after Brexit, Griveaux said “the first steps” meant to be addressed by October had not been settled, and Europe needed “a clearer position from the UK than the one we have now” if the negotiations were to advance.

After recent reports that German industry was preparing for no deal, Griveaux said France was “thinking about every possible scenario, but the worst-case one is not our favourite option. If it goes wrong, it will go wrong for everyone.”

He said France and the UK had a “strong relationship, a strong partnership” and “will not stop talking” because of Brexit. “A clear and fair Brexit is necessary,” he said, but a bad Brexit will “be worse for Britain” than for the continent.

Griveaux said France was undergoing “a silent and legal revolution” as a result of the election victories of Macron and his party. “We want to disrupt the economic and social model in France … not adjust it, but transform it radically,” he said.

That transformation was under way, he said, pointing to far-reaching labour market reforms that are being fast-tracked through by executive order and are due to enter into force by 22 September.

Griveaux played down union protests against the changes, saying participation had been low. After wide-ranging consultations over the summer, only one of France’s three major unions took to the streets on Tuesday.

The reforms gave “more freedom to employers, and protection and responsibility to employees”, Griveaux said, adding that a more flexible labour market was key not just for French firms but for foreign companies investing in France.

He said he was confident that within five to 10 years Paris would be the continent’s leading financial centre. “London will remain an important and major financial place, for sure. But in five to 10 years, Paris will be the first financial place in continental Europe.”

The message of the Macron administration was clear, he said: “Something has changed in the kingdom of France.”