International Monetary Fund (IMF) Managing Director Christine Lagarde said on Friday that Britain's exit from the European Union (EU) would be "very bad".

The IMF released its report on the U.K. economy. The lender said that the biggest risk to the U.K. economy was the referendum on Britain's membership in the EU.

"The long-run effects on UK output and incomes would also likely be negative and substantial," the IMF said.