MercoPress. South Atlantic News Agency

Tokyo, Osaka, Moscow, Geneva, Hong Kong, most costly cities

Weakened currencies have had their impact, but London has the most expensive public transport fares

London no longer stands among the most expensive cities in the world to live in, as the fall in value of sterling and declining house prices have made life less expensive in the UK capital according to Mercer consultancy.

London, last year rated the third most expensive city in the world, was leapfrogged by 13 other countries, to be ranked the 16th most expensive city.

The trend appears UK-wide; Birmingham and Glasgow, the only other UK cities that make it into the table, have both also moved down the rankings, dropping from 66th to 125th and 69th to 129th respectively.

The survey by consultancy Mercer measures the costs for expatriates of items, including housing, transport, food, clothing, household goods and entertainment for March 2009.

The survey compilers said that, overall, there had been a major reshuffle in the ranking owing to significant currency fluctuations, particularly the strengthening of the dollar, with most European cities falling down the table.

Tokyo topped the ranking, followed by Osaka, Moscow – last year’s most costly city – Geneva and Hong Kong.

Nathalie Constantin-Métral, a senior researcher at Mercer, said: ‘As a direct impact of the economic downturn over the last year we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s ranking.

‘Many currencies including the Euro and British pound have weakened considerably against a strong US dollar, causing a number of European cities to plummet in the rankings.’

Conversely, most Middle Eastern and African cities rose up the rankings. Johannesburg was the least costly city for expatriates.

The decline in rental prices was one of the main reasons for London becoming cheaper to live in. Mercer gave the example of a luxury two-bedroom unfurnished apartment. In London, this cost £2,400 a month – almost half the £3,751 you would have to fork out in Tokyo.

London residents may not be surprised to hear that public transport in the UK capital comes out the most expensive among 20 major cities for which Mercer provided a more detailed breakdown, at £3 for a bus or subway/underground ride. Travellers will pay £2.25 for the same privilege in Tokyo or £1.38 in New York.