EU executive says - be ready for 'very possible' no-deal Brexit

An EU flag flutters outside the Houses of Parliament in London

BRUSSELS (Reuters) - The European Commission on Wednesday said a no-deal Brexit was "very much possible" as it updated its contingency preparations and told countries, companies and people to be ready for the expected economic fallout.

The European Union's executive said it would pay particular attention in coming months to crucial areas including citizens rights, financial services, transport and fisheries, ahead of Britain's departure from the bloc, now due on Oct.31.

Its latest review of the EU's no-deal plans comes as Britain's Conservative Party is picking a new prime minister to replace Theresa May, defeated by her inability to pass through the UK parliament the deal she secured with the bloc seven months ago.

Some possible successors have said Britain would leave the EU at the end of October, deal or no deal.

"In light of the continued uncertainty in the United Kingdom regarding the ratification of the Withdrawal Agreement ... and the overall domestic political situation, a 'no-deal' scenario on 1 November 2019 very much remains a possible – although undesirable – outcome," the Commission said.

"The Commission considers that a withdrawal of the United Kingdom without an agreement remains a possible outcome, with all its negative economic consequences."

The Brussels-based executive, which leads Brexit negotiations with London on behalf of the bloc's other 27 member states, said contingency measures already in place remain "fit for purpose".

"Nevertheless, the Commission will continue to monitor political developments and assess if any extension of the adopted measures will be needed," it added.

They include EU plans to extend current access to fishing waters and prolong safety clearances for rail, road and air transport between the bloc and the UK, if London reciprocates.

They also offer visa-free travel to UK citizens and a year-long extension of cooperation in some financial services.

(Reporting by Gabriela Baczynska; Editing by Catherine Evans and Andrew Cawthorne)