It’s blocked so it will not be able to make and receive calls in UK on it no matter what sim card will be inside. Good thing is that you will not get a very high bill with some premium rate calls. The bad thing is that unless you had a pin code on the phone than the other functions are still accessible and working, camera, mp3 player, memory card etc etc.
My phone fell out of my pocket on the bus, managed to catch the bus 3 bus stops later but someone took the phone from the seat. I now always keep the phone in a zipped pocket and do the 3 point check: keys, wallet and phone.