A new UK-EU free trade area for goods will be created under Brexit plans agreed by Theresa May and her ministers at Chequers today.

However, after a day of crunch talks, the Cabinet agreed to step up preparations for a “no-deal” Brexit.

The trade proposals mean the UK will have the same rules for all goods as it currently does as a member of the bloc.

However, the government wants the UK to be free to diverge from EU rules over services, one of the biggest drivers of the UK economy.

During a day of discussions at the prime minister’s Buckinghamshire retreat, ministers accepted the new trade plan would reduce the levels of access available to European markets.

Ministers also appeared to acknowledge the EU is unlikely to consider any plan which would risk splitting the single market by stepping up preparations for a “no-deal” Brexit.