London is by far the most the most expensive city in the European Union and the seventh most expensive city in the world, according to the annual Mercer Worldwide Cost of Living Survey of 144 cities.
The survey measures the comparative cost of over 200 items in each location. These include housing, food, clothing, and household goods, together with transportation and entertainment. The data is used to assist multinational companies in determining compensation allowances for their expatriate workers.
Tokyo has replaced Hong Kong as the world’s most expensive city. Moscow is in second place, followed by Osaka. Thanks to a currency depreciation in Paraguay, Asuncion has replaced Johannesburg as the cheapest city.
With New York as the base city scoring 100 points, Tokyo scored 126.1 points and is almost three-and-a-half times costlier than Asuncion, which has an index of 36.5 points. New York remains the costliest city in North America, occupying 10th position in the rankings.
Copenhagen and Milan are the next most expensive EU cities after London.
The results show the gap between the world’s most and least expensive cities continues to narrow. This trend, however, has moderated, with the difference in the index scores falling by four percentage points this year compared to 15 points last year.
Yvonne Traber, Senior Researcher at Mercer, said that European cities had risen dramatically in the rankings due to appreciation of local currencies relative to the US dollar. “This year, the changing global economic environment has had a major impact on the cost of living index,” she said.
“The depreciation of the US dollar against the Euro, high inflation and economic recession in many countries have modified the scores of a number of cities.”