LONDON (Reuters) - The Bank of England published its quarterly inflation forecasts on Wednesday against a backdrop of sharply rising price pressures and a slowing economy.

Below are highlights of a news conference on the report given by Governor Mervyn King and other policymakers.

DEPUTY GOVERNOR, CHARLES BEAN

"It is plausible to expect the underlying rate of growth of potential to be somewhat lower over the next few years and we have in fact made that assumption in the projections we have published today."

GOVERNOR MERVYN KING

HOUSING

"It's hard to judge where prices may go. It may occur as much as from the passage of time as earnings rise from the continued falls in house prices. But I don't think anyone can judge how far it will go.

"We are in a period where prices are adjusting to new levels. Both buyers and seller are struggling to find out what that new level is. The market will determine it, not us or the government. Once we have reached that level then prices should normalise. But that does not mean back to levels seen early last year, that was clearly excessive."

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