Credit rating agency Fitch has lowered its outlook for Britain's sovereign debt from stable to negative, as the UK government announced a massive tax-cutting programme.

Fitch said in a statement, on Wednesday, that the large and unfunded fiscal package announced under the new British government's growth plan could lead to a significant increase in the fiscal deficit in the medium term.

Fitch maintained Britain's sovereign debt rating at AA-, one notch lower than Standard & Poor's.

But lowering the outlook means that in the future, Fitch may downgrade Britain's sovereign debt rating if the country's economic situation does not improve.

Liz Truss, who took over as British Prime Minister, in early September, announced with Treasury Secretary Kwasi Quarting a huge plan to support families in paying energy bills, accompanied by significant tax cuts.

The lack of clear figures about the expected high cost of the Truss plan and its repercussions on the already high inflation rates in Britain led to sharp declines in financial markets last week.