Euro area economic confidence slipped to 96.6 in March, after recording a revised 98.2 reading in February. That's the lowest estimate since September with consumer confidence (-16.3) also falling back on the month to its lowest since the latter months of 2023.It's all coming undone as the US-Iran war stirs up inflation fears in Europe once again. That as energy prices in the region are surging as the conflict spreads through the Middle East, with disruptions to key gas facilities - in particular Qatar.The risk now is that the conflict drags on for longer, and that might see higher prices become more entrenched. In turn, that will feed into broader price pressures in general. The ECB had previously been looking to potential rate cuts if and when German inflation settles, but that particular playbook is now thrown out the window. Interest rate hikes are back on the menu instead.In terms of consumer inflation expectations, the index there is seen rising to 43.4 in the latest report. That is a sharp jump and marks the highest since July 2022.Meanwhile, selling price expectations also rose to 19.7 - up from 11.5 previously. And that is another marked increase to its highest since February 2023.The trend is pointing to a somewhat repeat episode of the 2021-22 inflation scare brought about by the Russia-Ukraine conflict. For now, things are more measured with the energy price spike being not as drastic. But again if the situation carries on for longer, the risk of it becoming more and more profound is going to increase day by day. This article was written by Justin Low at investinglive.com.