EUROPEAN leaders were handed some good news yesterday when a business survey reported the first upturn in industrial confidence for 19 months.

A European Commission survey of more than 25,000 companies reported healthier manufacturing output in August and September - the first increase since the start of 1994.

The improvement will be welcomed by the leaders of European Union countries, which badly need stronger economic growth to help them meet the criteria for joining a single currency.

Most governments expected growth to be relatively healthy this year, but they have been disappointed by the slow pace of recovery so far.

The Commission said yesterday:

"We think we are on an economic turning point now and these figures seem to confirm this."

Nevertheless, the upturn remains limited. A French consumer confidence survey painted a picture of public gloom, stocks are reported by companies to be relatively high. But manufacturing prices are becoming firmer: although marginally more companies are expecting to cut prices, price falls are less marked than in summer, when industrial inflation appeared to be at a 30 year low.