Britain and the EU are preparing for negotiations on Britain's departure, which Prime Minister Theresa May formally triggered in late March but will start in earnest after a British election next month. May insists that Britain must leave the bloc's single market in order to control immigration.
Merkel said at an event with international labor union officials in Berlin that "if the British government says that free movement of people is no longer valid, that will have its price in relations with Britain."
Nearly 52 per cent of Britons who voted in a referendum last June chose to leave the EU.
"We will, of course, always think in the future relationship of the 48 or 49 percent who didn't back Brexit," Merkel said. She didn't specify how.