The UK is "doing great" following its vote to leave the EU, US President-elect Donald Trump has said.
In his first UK interview - with former Justice Secretary Michael Gove for the Times - Mr Trump said he thought the UK was "so smart in getting out".
Mr Trump promised a quick trade deal between the US and the UK after he takes office on Friday.
But the European Commission reacted to the comments by saying no formal talks were allowed before the UK left the EU.
Outgoing US President Barack Obama said in April last year that the UK would be "at the back of the queue" if it quit the EU.
Mr Gove - a prominent Leave campaigner during last year's referendum - asked Mr Trump whether the UK was now "at the front of the queue" for a trade deal with the US following the Brexit vote.
"I think you're doing great," Mr Trump said. "I think it's going great."
The president-elect said: "Trump said Brexit is going to happen, and it happened. Everybody thought I was crazy.
"Obama said, 'They'll go to the back of the line,' and then he had to retract his statement."
Mr Trump added: "Countries want their own identity and the UK wanted its own identity, but I do think if they hadn't been forced to take in all of the refugees then you wouldn't have a Brexit."
On a potential US-UK trade deal, he said: "We're gonna work very hard to get it done quickly and done properly. Good for both sides."
Mr Gove told BBC Radio 4's Today programme the president-elect wanted a trade deal "signature-ready at the earliest possible opportunity" - former UKIP leader Nigel Farage later said he expected a trade deal within three months of Mr Trump becoming president.
However a European Commission spokeswoman said that "categorically won't be possible" because formal talks "cannot take place in any official capacity until Britain has finished its negotiations with the EU".
Mr Gove, a columnist for the paper, added: "He (Mr Trump) stressed that he believed the European Union would potentially break up in the future and that other countries would leave.
"So in a sense he is both emotionally and financially invested in it."
Arriving at a summit in Brussels, Foreign Secretary Boris Johnson said: "I think it's very good news that the United States of America wants to deal a good free trade deal with us and wants to do it very fast, and it's great to hear that from President-elect Donald Trump.
"Clearly it will have to be a deal that is very much in the interests of both sides, but I have no doubt that it will be."
In his interview, Mr Trump talked about the recent dip in the value of the pound.
"The fact that your pound sterling has gone down?" he said. "Great, because business is unbelievable in a lot of parts in the UK, as you know. I think Brexit is going to end up being a great thing."
The president-elect's views came as Chancellor Philip Hammond said the UK may be forced to change its "economic model" if "closed off" from the European single market.
During the Times/Bild interview, held in Trump Tower, New York, the president-elect said he thought Mrs Merkel was the "by far the most important European leader".
"If you look at the European Union, it's Germany - it's basically a vehicle for Germany," he said.
Mr Trump said Mrs Merkel had made a "big mistake" by admitting more than one million migrants to the country.
"I think she made one very catastrophic mistake and that was taking all of these illegals, you know, taking all of the people from wherever they come from. And nobody even knows where they come from," he added.
Mr Trump also stressed that he would "start off trusting both Russian President Vladimir Putin and Mrs Merkel" on taking office, but would "see how long that lasts".
Talking about international security, Mr Trump argued that he had said "a long time ago that Nato had problems".
"One, that it was obsolete because it was designed many many years ago, and number two, that the countries weren't paying what they're supposed to pay."
Last November, Downing Street said Prime Minister Theresa May and Mr Trump had discussed the need for more countries to commit to spending 2% of national income on defence, when speaking on the telephone after the US election.
Mr Trump's comments on the UK and the EU came ahead of the launch of a cross-party campaign called Brexit Together.
It aims to bring together political voices from both sides of the referendum debate to develop a "shared vision" on immigration, the economy and market access, security and sovereignty.
'Ceremony and beauty'
One of the campaign's founders, Labour MP Caroline Flint, said "a lot was said in both campaigns... that left the public feeling quite baffled at some of the rhetoric".
It was "absolutely right we should have a good trading relationship with the EU and, of course, getting a deal with the US would be a fantastic opportunity as well", she added.
A separate report, co-written by Boris Johnson's former economic adviser, Gerard Lyons, says membership of the single market has been a "major drawback" for the UK's service industries. It recommends a "clean Brexit", leaving this and the customs union.
Meanwhile, the man tipped to become Mr Trump's ambassador to the EU has said the president-elect is committed to securing a trade deal with the UK, and preliminary talks could begin ahead of its formal departure from the 28-nation bloc.
Theodore Malloch, a professor at Henley Business School in Reading, told BBC Radio 4's Today programme: "If you want to facilitate something it can be done in an expeditious manner, so I would hope on the day Britain triggers Article 50 Mrs May would be able to announce we have just started discussions with the United States."
In his Times/Bild interview, Mr Trump also discussed his Scottish-born mother, saying: "She was so proud of the Queen. She loved the ceremony and the beauty, because nobody does that like the English, and she had great respect for the Queen and liked her.
"Any time the Queen was on television, for an event, my mother would be watching."
Liberal Democrat leader Tim Farron dismissed Mr Gove's interview with Mr Trump as "a puff piece from a clearly admiring fan".
He added: "I don't know the shape of the Europe that Trump dreams of, but I know it frightens me."