Inflation across much of Emerging Europe has risen in recent months. Nonetheless, there are good reasons to think that these rises will be short-lived. For a start, the pick-ups have been driven largely by energy inflation, stemming in part from the base effects caused by the collapse of oil prices at the end of 2008. These will fade over the course of this year, and may even go into reverse if the price of oil falls as we expect. Moreover, the large amounts of spare capacity that have opened up across the region will continue to weigh on core inflation for some time to come. Against this backdrop there is little chance of significant second-round effects developing as a result of the rise in energy inflation. Accordingly, policymakers will remain in no rush to tighten monetary policy.