Ms Fairbairn said a CBI member had likened a no-deal to “setting the shed on fire” while the house was in flames.

Dame Carolyn Fairbairn told the BBC that any buffers to cope with the additional cost and planning of an exit from the EU customs union and single market without a deal had been exhausted by the coronavirus pandemic.

She said: “The resilience of British business is absolutely on the floor. Every penny of cash that had been stored up, all the stockpiles prepared have been run down.

“The firms that I speak to have not a spare moment to plan for a no trade deal Brexit at the end of the year - that is the common sense voice that needs to find its way into these negotiations.”

It has been well documented that Brexit trade negotiations between the UK and the EU have been strained. The negotiations broke up last week with the EU’s chief negotiator saying that very little progress had been made on key sticking points, including future fishing rights in UK waters, and commitments to maintain a “level playing field” over regulation and competition.

A government spokesperson said the UK wanted to reach an agreement with the EU this year.

According to Dame Carolyn, the catastrophic impact of COVID-19 and the fight for business survival has diverted management attention away from any Brexit contingency planning. She is also worried that a political commitment to abandon the current transitional trading arrangements - come what may - will add to the burden on business at a critical moment.

She continued: “As one member put it to me - just because the house is on fire, it doesn’t make it ok to set fire to the garden shed. If we have a political timescale that takes us to a brinksmanship deal in December that will be catastrophic for British business - they will not be ready.

“Small businesses were not ready last time there was a no-deal Brexit threat - this time they will not have had a moment to prepare for it.”

• Read all of our articles relating to COVID-19 here.