London - second most expensive place to live

Mercer's 2004 cost of living survey shows London is now second most expensive city in world.

09:01 14 June 2004

Mercer's 2004 cost of living survey has shown that London is now the second most expensive city to live in.

The worldwide cost of living survey found that Tokyo is still the most expensive, closely followed by London

On the other end of the scale, Asuncion in Paraguay is cheapest city to live in.

London has moved up five places in the rankings to take silver from Moscow, which has this year moved down a place to third.

"There have been some dramatic movements in the rankings this year which are largely due to currency fluctuations, particularly of the US dollar and the Euro," said Marie-Laurence Sepede, Senior Researcher at Mercer.

Worldwide levels of expense appear to be narrowing: the gap between the world's most and least expensive cities has narrowed only marginally this year, by less than two points compared to four points last year and 15 points in 2002.

The survey covers 144 cities and measures the comparative cost of over 200 items in each location. These include housing, food, clothing and household goods as well as transportation and entertainment

High accommodation and transport costs together with the appreciation of the pound against the US dollar have pushed London up in the rankings.

However, Mrs Sepede said: "The scores are based on the cost of living for expatriates, who are more likely to stay in Central London where accommodation is most expensive."