Leading Brexiteer Nigel Farage met with the European Commission’s chief negotiator Michel Barnier in Brussels. Farage warned Barnier that support for quitting the bloc without any trade deal would increase unless Brussels offered a “compromise”.

His comments come as Theresa May appoints a new minister at the Brexit Department specifically in charge of preparations for a no-deal Brexit, as part of a wide-ranging cabinet reshuffle.

The Independent quoted a European Commission spokesperson as saying that the EU had “for months now been busy on planning for all possible outcomes”.

Commenting on the meeting between Barnier and Farage, he added: “As you can imagine, the two men discussed the state of play of Article 50 negotiations.”

Following the meeting, Farage said: “Mr Barnier clearly did not understand why Brexit happened. I left with the impression that it has not been previously explained to him that the Brexit vote was primarily about controlling mass immigration and democratic self-determination.

“Unless Mr Barnier can compromise somewhat and be prepared to give on services and financial services, the calls to go out of the EU under WTO [World Trade Organisation] rules will increase.”

He added: “I wouldn’t say it’s a happy new year for the Brexit deal.”

According to the Independent, economists have warned that a no-deal Brexit would be catastrophic for the UK economy.

For instance, the Rand Corporation, an American non-profit global policy think tank, has said “no deal” could cost the UK £103bn over the next 10 years, while the Organisation for Economic Cooperation and Development has put the figure at £40bn in 2019 alone due to sluggish economic growth.

“Business investment would seize up, and heightened price pressures would choke off private consumption,” the OECD said.