UPDATE 2-Bank of Canada says inflation rise hasn't shaken neutral stance
* Rates on hold at 1 percent since September 2010
* Bank flags "downside risks" of weak inflation
* Sees "elevated" risk of household imbalances
* Signals it will focus on core rate inflation in 2014
* Cuts Q1 GDP growth forecast; outlook for year unchanged (Recasts with comments from Governor Poloz at press conference)
By Louise Egan and Leah Schnurr
OTTAWA, April 16 (Reuters) - Canadian central bank chief Stephen Poloz said on Wednesday an interest rate cut is still a possibility even though the bank forecasts inflation will pick up speed this year and approach its 2 percent target.
The Bank of Canada held its benchmark interest rate at 1 percent, as expected, extending a 3-1/2 year freeze on borrowing costs.
Poloz described the bank's monetary policy stance as neutral, as it has been since last October, meaning there is just as much chance of a rate cut as of a hike. Continued...