Rising Euro sees London lose title of costliest city

LONDON has been named as one of the 10 most expensive cities in the world - but the strength of the euro has driven the cost of living even higher in other European capitals, according to a study published today.

From cars to CDs and cigarettes to cinema tickets, the study examines the cost of everyday life in all corners of the world.

London emerges as one of the dearest places to live but, while the capital isn't getting any cheaper, it has been overtaken by cities such as Paris and Copenhagen - which have seen prices rise since they ditched their national currencies.

Copenhagen emerges as the EU's costliest city and the sixth most expensive in the world. It came in at number 17 last year.

The survey, published by the Economist Intelligence Unit, shows that Oslo, Zurich, Copenhagen, Geneva, Paris and Reykjavik are all more expensive than London - ending the days when bargain hunters could take a weekend shopping break on the Continent.

Now the report's authors suggest we should head across the Atlantic, where prices are dipping slightly. New York has dropped from seventh place to 13th in the table.

William Ridgers, editor of the Worldwide Cost of Living Survey, said: "It is time to cancel the trip to Paris and go to New York instead.

"As the euro has appreciated in the past 12 months it has become relatively-more expensive to buy goods in the euro zone. It is now more expensive for Londoners to visit cities in the euro zone compared to a year ago, whereas all the cities in America and Canada have fallen."

London's high ranking disguises some significant price variations.

Mr Ridgers explained: "There are some areas in which London is among the cheapest in Europe. Supermarkets have to compete fiercely here and prices compare favourably with the rest of Europe and even America.

"Where we fall down is on car prices, in global terms we still pay a lot for our cars. Petrol and cigarettes are also more expensive here because of the tax. Eighty per cent of the price of a packet of cigarettes is tax, and the rest of the world does not pay as much as that."

The cost of living index is calculated on the cost of 130 everyday items but not house prices.

The cost of a pint of milk varies from 94p in Tokyo to 66p in New York and Paris, and 55p in London.

A trip to the cinema in Tokyo will set you back 12.79, compared with 8.50 in London, 6.14 in New York and 5.93 in Paris. A litre of unleaded petrol costs 60p in Tokyo, 77p in London, 75p in Paris, 23p in New York - and just 1p in Tehran.

The 10 most expensive cities in the world are: Tokyo, Osaka, Oslo, Zurich, Hong Kong, Copenhagen, Geneva, Paris, Reykjavik and London.

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