Temporary decline in inflation spurs further improvement in financial health of the UK consumers

UK consumers' financial wellbeing improved for the fourth successive quarter, according to Alliance Trust's ongoing study. In the fourth quarter of 2009, Alliance Trust’s UK Financial Reality Index rose from 80.3 to 97.7, primarily due to lower levels of inflation and good stock market performance over the year. This is the highest index level recorded since Q2 2004. However, although this improvement is clearly good news, the index remains below the critical level of 100, indicating that consumers’ financial health remains generally weak.

Shona Dobbie, Head of the Alliance Trust Research Centre, said, "While it is encouraging to see our index of consumers' financial wellbeing improving once again, this has been largely due to the temporary drop in inflation and consumers continue to face negative pressures from the relatively weak labour market and subdued economic activity. Lower inflation combined with exceptionally low levels of interest rates have undoubtedly eased some budget pressures, and the rise in the stock market over the last year has boosted household wealth. However, the overall financial situation facing households is still clouded by the uncertain economic outlook and the possibility that unemployment could rise further.

Our index, which has been a good predictor of consumer expenditure, suggests that there will be some improvement in consumer spending, but that this is still likely to remain relatively weak in the coming months. Unfortunately, the prospect of higher inflation in the months ahead means that any improvement could prove to be only temporary, as financial conditions worsen once more."

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Alliance Trust - Interim Results for the six months ended 31 July 2009

Alliance Trust has announced its interim results of the six months ending 31 July 2009. Over the last six months, the Company has reiterated its focus on investment in equities by reducing cash and increasing core equities exposure to 89% of net assets, adhering to its long term conviction-based investment approach. Other highlights were that Alliance Trust Increased exposure to the UK, US and Asia; increased Net Asset Value by 6.8%; and achieved total shareholder return of 8.8%. For the half-year period, it ranked 36th of 44 Global Growth and Global Growth and Income Investment Trusts for total shareholder return

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Alliance Trust PLC appoints executive director

Alliance Trust PLC today announces that it has appointed Robert Burgess (aged 44) to the Board as an executive director with immediate effect. Robert Burgess joined Alliance Trust as Managing Director of its wholly-owned subsidiary, Alliance Trust Savings, in February 2009. He will become Chief Executive of that business and will continue to lead its development.

Before joining Alliance Trust, Robert Burgess held senior banking roles within the Lloyds TSB group, managing the retail and business banking sectors as an executive director of Lloyds TSB Scotland and subsequently as regional director for its retail banking business in London and the South East.

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