By Jason Douglas

LONDON--The U.K. would enter a year-long recession following an abrupt and messy split with the European Union, according to a stress test of Britain's public finances published by its fiscal watchdog.

The Office for Budget Responsibility said in its analysis, released Thursday, that a so-called no-deal break with the EU on Oct. 31 would push the U.K. into recession in the fourth quarter of 2019.

A year-long slump would follow, during which the economy would shrink by 2.1% before returning to growth. By 2024, the economy would still be around 1.6% smaller than it would have been had Brexit gone smoothly, the OBR said.

The stress test represents one possible scenario for the U.K. economy in the event of no deal and isn't a forecast, the OBR said.

The decline in output would push up government borrowing, the OBR said, raising questions about how the two contenders to succeed Theresa May as prime minister, frontrunner Boris Johnson and underdog Jeremy Hunt, would finance promised tax cuts.

Write to Jason Douglas at Jason.Douglas@wsj.com

(END) Dow Jones Newswires

July 18, 2019 05:12 ET (09:12 GMT)

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