Economic and consumer confidence in Europe fell in March, according to preliminary data from the European Commission. This is the latest evidence of how the Iran war is negatively affecting growth and inflation expectations. Economic sentiment declined in both the EU and euro zone, with employment expectations also under pressure across Europe and the euro zone. Consumer confidence also dropped to its lowest level since Oct. 2023 due to a decrease in consumer expectations about the future of their household's financial situation. This follows separate data showing euro zone private sector output falling to a 10-month low and toward contraction territory, raising fears of looming "stagflation". The European Central Bank now anticipates economic growth of 0.9% in 2026 and headline inflation of 2.6% this year. European leaders have refused to participate in the U.S. and Israel's bombardment of Iran, seeing the war as a choice, rather than necessity. However, the US has sent thousands of troops and military resources to the region, signalling a potential ground offensive.