London now third most expensive city

2008-08-01

London has dropped from second to third in Mercer HR Consulting’s Worldwide Cost of Living 2008 survey. Moscow remains the most expensive place to live, while Tokyo has climbed two places to rank second.The other cities that make up the top five are Oslo, which climbs six places to fourth, and Seoul in fifth place. The gap between the world’s most and least expensive cities is widening, with Moscow three times dearer than the least expensive in the world, Asuncion in Paraguay. Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees. Yvonne Traber, research manager at Mercer, said: ‘Current market conditions have led to the further weakening of the US dollar which, coupled with the strengthening of the euro and many other currencies, has caused significant changes in this year’s rankings.‘Although the traditionally expensive cities of Western Europe and Asia still feature in the top 20, cities in Eastern Europe, Brazil and India are creeping up the list. Conversely, some locations such as Stockholm and New York now appear less costly by comparison.’Sofia in Bulgaria remains the least expensive European city, in 97th place, although it has climbed 11 in the overall ranking.Several European cities have experienced a significant rise in the rankings this year, mainly as a result of local currency strengthening against the US dollar. For example, Prague has jumped from 49th to 29th place and Warsaw is up to 35th from 67th in 2007. Istanbul has climbed 15 places to 23, reflecting the Turkish lira’s significant appreciation against the US dollar as well as general price increases, especially for accommodation.In the UK, Birmingham and Glasgow have both moved down in the rankings, dropping from 41st to 66th and 36th to 69th respectively. Both Dubai and Abu Dhabi have also dropped significantly this year, to 52 and 65 respectively, while New York is the only North American city to feature in the latest top 50, in 22nd place, down seven.All other US cities have also experienced a significant decline in the rankings, with Los Angeles moving from 42nd to 55th place, Miami from 51st to 75th and Washington DC from 85th to 107th.