Pro-EU demonstrators protest outside parliament in Westminster London, Britain, September 13, 2018. REUTERS/Henry Nicholls

BRUSSELS (Reuters) - Britain has handed over more data on trade flows with Northern Ireland at the request of chief negotiator Michel Barnier, an EU official said on Thursday, part of efforts to address the border question with EU member Ireland.

Signals from Brussels have buoyed hopes that Britain and the European Union can agree a divorce deal before March, but there are still concerns over whether the two sides can agree a way to prevent the return of a hard border on the island of Ireland.

Both sides want to avoid a hard border because it could undermine a 1998 peace agreement that ended decades of sectarian conflict in the north, but it is still unclear how goods crossing the border in Ireland would be monitored once Britain has left the EU’s customs union and the single market.

EU officials have asked London for more trade data to try to work out whether most trade between mainland Britain and Northern Ireland passes through Dublin. If so, it would make it easier for the bloc to check the goods.

The official said the trade data was now being analyzed.

An earlier report by Bloomberg that Britain was helping Brussels solve issues around the Irish border and that Prime Minister Theresa May was preparing to make more concessions after her party’s conference later this month buoyed the pound.

A spokesman for May said he was not aware of the report, while another government source doubted its conclusions.

EU diplomats and officials say work has been going on for some time in Brussels to draft some changes in wording to the EU’s Irish backstop proposal and it has recently picked up pace.

The aim, as Barnier has said, is to ‘de-dramatize’ an issue which has sparked hostility from May’s allies in Belfast who fear the EU’s plans to effectively keep Northern Ireland within its economic space would isolate it from the British mainland.