A Brexit deal is nearly done that would give UK-based financial services firms some form of access to European markets, a British official told Reuters.

The Times reported that a tentative deal had been struck.

"We are making progress," the official, who spoke on condition of anonymity, said, adding that the financial services deal would be based on the EU's existing so called equivalence system.

A deal may be expected if an overall Brexit deal is struck this month, the official said.

Prime Minister Theresa May's office and Britain's department for exiting the EU did not immediately comment on the report.

Sterling extended its gains on Thursday after the report, jumping 0.9 per cent to as high as $1.2881, sending the currency to a five-day high.

Against the euro, it rose to 88.155 pence per euro before settling up half a per cent at 88.21 pence.

The gains follow a rise for sterling on Wednesday when Brexit minister Dominic Raab said he expected a Brexit deal with Brussels to be concluded by November 21. The British government later said there was no set date for Brexit talks to finish.

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