By Carla Mozee, MarketWatch Pound slides after dovish BOE inflation report

LONDON (MarketWatch)--U.K. stocks fell on Wednesday, with banking stocks lower after paying fines over allegations of attempted rigging of the foreign-exchange market.

The FTSE 100 lost 0.3% to 6,611.04. On Tuesday, the index marked a fifth gain in a row by rising 0.2%.

A total of $3.3 billion will be paid by five banks to U.S., British and Swiss regulators to resolve long-running investigations into whether the banks engaged in activities in the foreign-exchange markets to benefit their own trading positions, sometimes at the expense of their clients.

The British and U.S. settlements were made by HSBC Holdings PLC, Royal Bank of Scotland Group PLC, UBS AG (UBS), Citigroup Inc. (C) and J.P. Morgan Chase & Co. (JPM). Read: 'Have that my son', 'Bravo'--chat logs from FX probe revealed (and it's no boring read)

In London, shares of HSBC (HSBC) were down 0.3% while RBS (RBS) dropped 1%.

The U.K. Financial Conduct Authority said HSBC Bank PLC was fined GBP216.36 million ($343 million), and Royal Bank of Scotland PLC was fined GBP217 million ($344 million). The Commodity Futures Trading Commission meanwhile fined RBS $290 million and HSBC $275 million.

Shares of Barclays PLC (BCS) fell 2.2% as the bank pulled out of late-stage settlement talks with regulators, saying it decided to seek a "more general coordinated settlement."

Meanwhile, shares of J Sainsbury PLC stumbled 1.1% after the supermarket chain swung to a pretax loss for the first six months of its financial year and warned that profitability in the second half will likely be lower than in the first half. Sainsbury is planning additional investment to cut prices to lure in more customers.

The British pound moved lower after the Bank of England cut its forecasts for growth and inflation and signaled it is unlikely to raise interest rates until the second half of next year. The pound (GBPUSD) fell to $1.5818, from $1.5918 late on Tuesday.

Sterling briefly traded as high as $1.5944 on Wednesday, according to FactSet, after U.K. government data showed wages rose in the three-month period to September, while the unemployment rate remained at 6%.

The reading of 6% slightly missed forecasts of a 5.9% reading. The Office for National Statistics also said wages including bonuses rose 1% year-over-year in the period, beating forecasts of an improvement of around 0.9%.

Additionally, the Organization for Economic Cooperation and Development said economic growth is set to slow in the U.K. and the eurozone over the coming months.

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