Global rating agency, Fitch Ratings has said in a new report that it has downgraded the UK from AA+ from AAA due to various factors including a weaker economic and fiscal outlook.

Fitch reduced the rating from AAA to AA+ with a stable outlook, the company said in a statement in London today. It also reduced its growth projection and forecast that the debt would rise to 101 per cent of gross domestic product in the fiscal year 2015-2016. Fitch had put the UK on negative watch on March 22, just days after the government cut forecasts for growth in the annual budget.

“Despite the U. K.’s strong fiscal financing flexibility underpinned by its own currency with reserve-currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with an AAA rating,” Fitch said.

The decision may be a further setback for the Chancellor of the Exchequer George Osborne following the International Monetary Fund said that the UK government should against think about the level of budget cuts in the country. Osborne had earlier said that he believes that the government might take longer to reduce debt than earlier expected.