Tensions over threat of deportations eased following latest discussions

British consumers could face post-Brexit price rises after Chancellor Sajid Javid ruled out alignment with European Union regulations once the country leaves the bloc at the end of January.

There will be an 11-month transition period until the end of the year, during which EU regulations will still apply, as the sides try to agree a trade deal, a target widely regarded as unrealistic.

But Javid told the Financial Times there would be no extension beyond that. "There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union－and we will do this by the end of the year," he said.

"We're… talking about companies that have known since 2016 that we are leaving the EU."

This contrasts with what Javid himself said before the 2016 referendum, where he campaigned for Remain.

In an article still up on his website, entitled The only thing leaving the EU guarantees is a lost decade for British business, he warned "If we leave … that will put Britain at a serious disadvantage.

"The remaining EU nations will want to secure a deal that's good for their economies… and who could blame them? If I was in their shoes, I'd do the same. If Germany left the EU tomorrow, I'd make damn sure any trade agreement we reached put British businesses first."

Javid's recent remarks are seen as a statement of intent for the negotiation period but even before they were made, European Commission President Ursula von der Leyen had warned "The more divergence there is, the more distant the (post-Brexit) partnership has to be."

Business leaders reacted less than enthusiastically to his comments. Claire Walker of the British Chamber of Commerce said the lack of clarity could see production moved away from the UK.

"The government must clearly communicate these changes in a timely way and provide substantial support to help firms adapt," she said."Otherwise they will struggle to make the most of new opportunities as Britain sets its own trading policies."

The Confederation of British Industry urged the government "not to treat this right as an obligation to diverge," while Labour's shadow chancellor John McDonnell called it "ideology over-riding common sense".

More positive news has come over the issue of the post-Brexit status of EU citizens in the UK. The application process for settled status runs until June 2021, and there had been fears those who did not complete it would face deportation. Following discussions between EU negotiator Guy Verhofstadt and Brexit Secretary Steve Barclay, this seems to have been ruled out.

"I wanted to be sure that there would be no automatic deportation for people after that period because it can be people who are very vulnerable," said Verhofstadt. "The idea would be that even these people, after the grace period, they will have the possibility to apply giving the grounds for why it was not possible (to apply for settled status) within the normal procedures."

A British Home Office statement said: "We have made it clear that where people have reasonable grounds for missing the original deadline, they will be given a further opportunity to apply."