German Chancellor Angela Merkel on Tuesday dismissed hopes in Westminster that after Brexit the UK could continue have access to the EU single market for goods only.

Merkel nevertheless remained confident that the UK and EU would manage to reach a deal by October.

What's Merkel stance on Brexit?

Addressing business leaders at a Federation of German Industries (BDI) conference in Berlin, the German chancellor said:

The UK could not remain a part of the single market for goods, but not for capital or services, as UK Prime Minister Theresa May's Brexit plan suggests.

Based on the UK's vision of a future relationship with the EU, it would likely be based on a "very, very intensive free trade area."

Any future deal should be as detailed as possible, otherwise the Brexit transition period until the end of 2020 would be too short a time frame to draw up a comprehensive agreement.

Europe's economies are suffering on the back of Brexit uncertainty. "Businesses need clarity," which was why the EU has some its "hardest days" ahead.

Defender of global trade: Merkel also asserted that Germany would stand up against any forces seeking to erode the global trade regime. The World Trade Organization (WTO) was facing "huge challenges," she said, spurred in particular by US President Donald Trump's decision to slap punitive tariffs on Chinese imports worth billions of dollars. "If the rules aren't being kept to, that means the system is being hollowed out," she said.

Germany stronger in Europe: The chancellor also said she was grateful that Germany, as a member of the EU, was protected from direct US trade pressure. Trump has repeatedly hammered Germany for its trade surplus. Merkel also lauded Brussels for agreeing with Washington to impose a temporary freeze on further tariff hikes.

Read more: US trade with the EU, Germany in numbers

Merkel admits government must do better: Merkel echoed remarks made in her speech on Monday, in which she apologized for the scandal engulfing former German intelligence chief Hans-Georg Maassen. The government had been too "preoccupied with itself," she admitted, adding that she wished the incident had been handled differently. Earlier, Dieter Kempf, the head of the Federation of German Industry, accused Merkel's Cabinet of doing more infighting than governing.