Germany's Merkel sees a lot of work to do on Brexit by October

SALZBURG, Austria (Reuters) - Substantial progress must be made on Brexit by October if a deal is to be struck in November, German Chancellor Angela Merkel said on Thursday after leaders discussed a possible final Brexit summit for November.

Merkel said British Prime Minister Theresa May's so-called Chequers plan, hashed out at her country home in July, offered a good basis for negotiations but there was still a lot of work to do on the issue of future EU trade relations with Britain.

"It was clear today that we need substantial progress by October and that we then aim to finalise everything in November," Merkel told reporters at an informal European Union summit.

"We have come a long way already on the exit agreement ... we still have a lot of work to do on the future relationship," she added.

Diplomats said leaders agreed to hold their diaries for a possible final Brexit summit in Brussels on the weekend of Nov. 17-18. Britain is due to leave the EU on March 29, 2019.

"There is a lot of common ground on the basis of Chequers, especially in the area of domestic security and also foreign cooperation and other issues, but there is still a lot of work to do on the question of how future trade relations will look," Merkel said.

She added: "You can't belong to the single market if you are not part of the single market but you can develop a lot of creativity to find practical, good, close solutions and we still have work to do on that."

(Reporting by Francois Murphy; Writing by Paul Carrel; Editing by Michelle Martin)