The UK Chancellor of the Exchequer Philip Hammond, speaking on the margins of a G20 summit in Hamburg, said his preference was to negotiate a “transitional structure” that takes his country out of the Single market and Customs union “but in the transition phase replicates as much as possible of the existing arrangements”.

According to Hammond his aim would be to minimize the shock to business.

The UK should negotiate a transitional Brexit deal that replicates its membership of EU structures as closely as possible, Hammond continued, acknowledging the UK will not stay in the Single market or Customs union.

Hammond welcomed corporate input into the discussion on managing Brexit, a day after the CBI employers group said Britain should stay in the EU’s Single market as it works out new ties with the bloc beyond Brexit in 2019.

“I’m glad that the business community is exercising a voice in this discussion. I think that is helpful,” he said, adding: “I do not believe it is either legally or politically possible to say in the customs union and in the single market.”