Britain and the European Union held fresh meetings on Monday to try to unlock their Brexit impasse after London threatened to abandon trade talks and go its own way next year despite warnings of further damage to the Covid-hit economy.

The UK government launched an information campaign advising businesses that “time is running out” to be ready for a complex new trading chapter when a post-Brexit transition period expires at the end of this year, deal or no deal.

But industry groups warned anew of potential chaos for road hauliers and the possibility of drugs shortages, with vital preparations still in the early stages as Britain unwinds nearly five decades of European integration.

Confederation of British Industry (CBI) deputy chief Josh Hardie said a “hat-trick of unprecedented challenges” loomed thanks to the first wave of coronavirus earlier this year, its resurgence now and “uncertainty over the UK’s trading relationship with the EU”.

Senior minister Michael Gove said Sunday the door remained “ajar” for an overarching trade deal to remove much of the uncertainty if the EU shifts position, despite Prime Minister Boris Johnson declaring last week he was ready to abandon talks.

“If the EU change their position then we will be willing to talk to them but they must be ready to discuss the legal text of a (trade) treaty in all areas and they need to show a genuine wish to find a solution that respects UK sovereignty and independence,” Johnson’s official spokesman said on Monday.

“If not, then we’ll end the transition period on Australia terms,” he said, referring to a barebones arrangement governed by World Trade Organization (WTO) tariffs and quotas.

Gove met European Commission vice president Maros Sefcovic in London on Monday morning to discuss the two sides’ existing divorce treaty, which Britain has threatened to redraw through a new internal market bill to regulate post-Brexit trade within the UK.

The contentious law has passed Britain’s House of Commons and was due later Monday to be debated in the upper chamber, the House of Lords, which includes Anglican bishops.

In a rare joint letter published in the Financial Times, the five most senior bishops including Archbishop of Canterbury Justin Welby said the bill set a “disastrous precedent” for violating the rule of law.

UK chief negotiator David Frost and EU counterpart Michel Barnier will later Monday discuss the structure of their troubled negotiations by videoconference in light of Johnson’s threat, which scuppered a planned visit to London this week by Barnier.

The two sides disagree on state subsidies, how rules on fair competition will be policed and how much access EU fishing fleets will get to UK waters.

In a rare note of harmony, Sefcovic signalled that his talks with Gove on guaranteeing the rights of each side’s expatriated residents were “progressing very well”.

But the failure by Frost and Barnier to strike a trade deal would see Britain and Europe revert to WTO terms, potentially devastating for economies already weakened by the pandemic.

“Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act,” Gove said in launching the new campaign.

British business groups say they are doing all they can to prepare but are hampered by a lack of government clarity, including about a new IT system for EU-bound truck drivers that is still in the testing stage.

The Association of the British Pharmaceutical Industry urged the government to agree a sector-specific agreement with the EU to ensure an uninterrupted flow of lifesaving drugs, if a comprehensive trade deal cannot be reached in time.

“Our members are preparing for the end of the transition period at the same time as coronavirus cases rise across Europe,” ABPI chief executive Richard Torbett said.

“This should be enough to focus minds.”

European stocks rose on Monday as strong earnings updates from Swiss wealth manager Julius Baer and Dutch firm Philips overshadowed worries about fresh coronavirus restrictions across the continent.

Morning trading in some European markets, including Paris’ CAC 40 and Amsterdam’s AEX, was hit by a technical issue at exchange operator Euronext, which halted trading in all its cash and derivatives products.

The CAC 40 was up 0.8% at 4,976.15 points before the halt, while other European bourses pared some gains.

The pan-European STOXX 600 index gained 0.6%, recovering much of last week’s losses.

Julius Baer gained 5.4% after it indicated an improvement in profitability for the first nine months of 2020 as client activity increased and it cut costs.

The broader financial services sector rose 1.2%, with Credit Suisse and UBS up between 2.8% and 4.2%.

Health technology company Philips reported a better-than-expected jump in core earnings.

European third-quarter earnings are forecast to recover from a pandemic-led slump, with analysts expecting companies on the STOXX 600 to report an average 36.7% drop, compared with a 51% drop in the previous quarter, according to Refinitiv data.

Agencies