In this paper, we investigate the performance of an intelligent reflecting surface (IRS) aided multiple-input single-output (MISO) wireless system in the absence of direct link. We focus on the practical scenario where the N reflecting elements of the IRS have a spatial correlation between them, and both the destination and IRS are subject to interferences. Moreover, the IRS design with discrete phase shifting is considered. In order to quantify the impact of spatial correlation, phase error and interference on the system performance, we provide closed-form and asymptotic expressions for the system outage probability. Additionally, approximations for the average channel capacity are also derived. To gain further insight, the achievable diversity gain of both partial and full correlation cases is quantified. The analytical and simulation results reveal that spatial correlation has a dominant effect and reduces the system diversity order, but it is beneficial to the average channel capacity. Phase error results in performance degradation. Interference degrades the system performance only by reducing the coding gain. Compared to the direct path, interference from the reflected path plays a major role in reducing the system performance.