The EU and U.K. failed to reach an agreement on sufficient progress towards a Brexit deal Monday following a key lunch between Theresa May and Commission President Jean-Claude Juncker.

In a joint press conference following the meeting, both leaders tried to put a positive gloss on the outcome, saying they were within touching distance of a deal.

“This is not a failure,” said Juncker. “I’m very confident that we will reach agreement in the course of this week.”

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Officials had hoped the lunch would clinch a deal on “sufficient progress” that would pass muster with EU27 leaders who must formally sign off on any agreement at the European Council summit in Brussels next week. That would signify the go-ahead to move on to a second phase of talks focused on a transition period and the framework of a future trade relationship.

Instead, they appeared to be snared on details related to two of the three key divorce issues: the question of the Ireland-Northern Ireland border, and citizens’ rights. The issue that for months had created the main standoff — the so-called single financial settlement — apparently was the matter closest to an agreement.

In their brief joint statement to the press, which did not include questions, the leaders said their negotiators would reconvene later this week and they were confident that a deal was in reach.

“I have to say that she is a tough negotiator and not an easy one,” Juncker said. “She is defending the point of view of Britain, with all the energy we know she has. And I am doing the same on the side of the European Union.”

But he said: “Despite our best efforts — and the significant progress we and our teams have made over the past days on the remaining withdrawal issues — it was not possible to reach a complete agreement today.”

May said: “On a couple of issues some differences do remain … we will reconvene before the end of the week, and I am also confident that we will conclude this positively.”

The prime minister was due to go directly from the press conference to a meeting with Donald Tusk, the European Council president. It was Tusk who set Monday as the “absolute deadline” for an improved offer from the U.K. After the meeting, he also said there was still time for a deal before the summit.

“It is now getting very tight but agreement at December #EUCO is still possible,” Tusk wrote on Twitter.

Despite their reassurances, the pressure is certain to intensify if an agreement is not finalized within the next 36 hours, before a meeting of the College of Commissioners on Wednesday.

While there is no technical or legal deadline for concluding phase one of the talks, a failure to do so by the end of the year could prove deeply damaging to Britain, where businesses are craving some certainty in the Brexit process.

The failure to reach a deal could prompt many businesses to begin setting in motion contingency plans that could include relocating investments from the U.K.