The U.K. and European Union could strike a deal on their future trading and security relationship early next week as the two sides edge closer to agreement on the biggest sticking points.

As talks continue in Brussels, officials are planning for the possibility of a breakthrough to be announced as soon as Monday, although no precise day has been settled on, people familiar with the discussions said. The pound climbed by as much as 0.4% against the dollar.

They also warned that there was still the potential for the negotiations to collapse, with the two sides still some way apart on the familiar stumbling blocks that have plagued the talks since they started in March. Getting a deal will still need the U.K. to make big political decisions over whether it is prepared to compromise, particularly on the thorny topic of access to British fishing waters, an EU official said.

The bloc’s chief Brexit negotiator, Michel Barnier, has penciled in a meeting with the EU’s 27 national ambassadors on Friday to brief them on progress, the official said. Prime Minister Boris Johnson may then hold another phone call with European Commission President Ursula von der Leyen, but that is yet to be confirmed, the official said.

The negotiating teams can now see “the landing zones” around an accord, Irish Prime Minister Micheal Martin told the Bloomberg New Economy Forum.

“Politically Damaging”

Failing to reach a deal would be “politically damaging all around,” Martin said. “Will the decision be made in London to go for it and say, let’s get a deal done? Some of us think that’s an issue that yet has to be determined.”

In addition to fisheries, the two sides are still at odds over the level playing field for business, including how the U.K.’s labor and environmental standards should evolve alongside those of the EU. There is also disagreement over how breaches of the overall deal should be penalized, with the U.K. resisting the bloc’s efforts to including fisheries in the over-arching enforcement mechanism.

Both sides have used the pressure of time to try to get the other to cave in, but as the U.K.’s departure from the EU’s single market and customs union on Dec. 31 draws closer, real deadlines are starting to crystallize. As the talks have progressed, both camps have made attempts to predict when the other believes they can negotiate no longer.

While both sides need to ratify the agreement in their respective parliaments, the British government believes it has the upper hand because it can get approval more quickly than the bloc, possibly in a matter of days.

The European Parliament has indicated it needs about three weeks to scrutinize any agreement before it holds a vote on the deal, currently scheduled for Dec. 16. But there are emergency plans for that to be held after Christmas if necessary, the official said.