London life still most expensive in Europe

London has kept its title as Europe's most expensive city, according to research by Mercer Human Resources.

13:25 20 June 2005

London has kept its title as Europe's most expensive city, according to research by Mercer Human Resources.

But the capital has dropped one place in the world rankings and is now the third most expensive place to live in the world, lying behind the Japanese cities of Tokyo and Osaka.

Other British cities are much more reasonable, with London's closest contenders, Glasgow and Birmingham, coming in at 40th and 47th respectively.

More than 140 cities are compared in the study, which takes into account the cost of more than 200 items such as food, clothing, transport and entertainment.

According to the figures, London is 20.3 per cent more expensive than New York, the city used as the base cost of living, which is a 1.3 per cent increase on last year.

"Steep accommodation and transport costs together with the appreciation of the pound against the US dollar have contributed to the city's high ranking," explained Marie-Laurence Sepede, research manager at Mercer.

New York is still the most expensive city in North America, while four of the ten costliest cities were in Asia.