By Marcus Walker and Ian Talley 

The U.K.'s decision to quit the European Union rocked global equity and currency markets Friday, but the full impact to the wider economy may take years to play out.

In the U.S., concern that deeper unrest in Europe will wash over the global economy threatens to further damp business investment and erode consumer confidence. At the same time, a rising dollar will make imports cheaper, and uncertainty could help keep mortgage rates low for still longer.

Economists worry further weakening of the EU could tilt the U.K. and the region back into recession. Some analysts said the economic harm can be diminished if the British and other governments handle the terms of Britain's separation well.

In the U.S. and Japan, a continued rising of the dollar and yen would weigh on exports as their products become less attractive to consumers overseas, and further sour business investment. A rising dollar could also confound central bank policy and further delay any rate increases by the Federal Reserve.

To help reassure jittery markets, the Group of Seven largest industrialized economies said in a statement they were monitoring global currency volatility and prepared to act against disorderly markets.

Business groups called on the U.K. government to quickly set out how the country's divorce from the EU will work, and to clarify Britain's international economic arrangements before getting bogged down in political fighting.

"The urgent priority now is to reassure the markets," said Carolyn Fairbairn, director general of the Confederation of British Industry.

The sharp fall in the pound could fuel a sharp and damaging rise in inflation, helping push the U.K. into a recession and force the Bank of England to raise rates, a measure that would further crimp growth. Unlike in 1992, when a devaluation led to economic recovery, the central bank isn't in a position to sharply cut interest rates to spur growth, because rates are already near zero.

The combination of a cratering pound, other financial-market volatility, and lengthy uncertainty are expected to hurt exports and business confidence in many other European countries.

German manufacturers expect to take a hit. "It won't be long before our machinery exports to Britain decline noticeably," said Thilo Brodtmann, chief executive of the German engineering-industry association VDMA.

The potential political effects could cause the greatest economic disruption. Anti-EU nationalists in France, the Netherlands and elsewhere are pushing for their own countries to vote on leaving the EU.

"Brexit alone wouldn't be a disaster for the global economy, but a breakup of the EU would," said Megan Greene, chief economist at Manulife. "I don't think it's likely, but it's a higher risk than it was yesterday."

--Paul Hannon contributed to this article.

Write to Marcus Walker at marcus.walker@wsj.com and Ian Talley at ian.talley@wsj.com

(END) Dow Jones Newswires

June 24, 2016 19:17 ET (23:17 GMT)