Ireland's Prime Minister Leo Varadkar arrives for a meeting with European Union's chief Brexit negotiator Michel Barnier in Brussels, Belgium October 4, 2018. REUTERS/Yves Herman/File Photo

DUBLIN (Reuters) - Irish Prime Minister Leo Varadkar said on Saturday that he is hopeful that there will be decisive progress in the next two weeks to conclude a Brexit deal but that there is still more work to be done.

European Commission president Jean-Claude Juncker said earlier on Saturday that the potential for a deal between the European Union and Britain had grown in recent days, confirming what diplomatic sources have told Reuters.

EU Brexit negotiators believe an agreement on the terms of Britain’s exit from the bloc is “very close”, the sources said, in a sign a compromise on a major sticking point - the future Irish border - might be in the making.

“There will be a summit in two weeks in Brussels that will be a time for us to take stock. I would be hopeful at that point that there would be decisive progress allowing us to conclude an agreement by November,” Varadkar told reporters.

“That remains to be seen yet. I think there is a fair bit of work to be done. It’s increasingly important that we conclude a deal sooner rather than later.”

Varadkar added that Brexit will feature centrally in next week’s budget for 2019 and that the government’s new plans to run a balanced budget for next year would give it the capacity to borrow “if we do run into problems with Brexit.”

He also said that if the government needs to help businesses and farmers affected by Brexit, it could dip into the state’s new ‘rainy day fund’ - a contingency reserve that will be set up next year to shield the economy from future shocks.