LONDON – For the first time since 2002, the cost of living in London is cheaper than New York, according to the Economist Intelligence Unit’s cost of living survey.

In the past few months, the relative cost of living around the world has changed as European currencies such as the sterling, euro and the Norwegian krone declined drastically.

In the UK, the weakening pound sees London–originally-ranked in eighth position–slide to 27th place – below New York’s ranking of 23rd. New York used to be the 38th most expensive city to live in.

Norway’s Oslo – the former most expensive city dropped to fifth position, trailing behind Paris (third) and Copenhagen (fourth).

“Two factors drive the relative cost of living: local prices and exchange rates. Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities,” said the editor of the report, Job Copestake.  

The survey, across 140 countries, is based on a comparison of the September 2008 cost of living survey to the February 2009 exchange rates and assumes that local prices have not changed.

The stronger yen means Tokyo is now the world’s most expensive city to live in and Osaka the second. The strong US dollar also sees a number of cities such as New York, Los Angeles and Chicago jump in rank.

Despite the decline in European currencies, Western Europe remains the most expensive region to live in with seven cities dominating the top 10 list. Zurich ranks sixth, Frankfurt seventh, Helsinki eighth and Geneva ninth.

The cities which are cheapest to live in remain predominantly Asian, and include Kathmandu, New Delhi, Mumbai and Karachi.

Rank    City
1           Tokyo
2           Osaka
3           Paris
4           Copenhagen
5           Oslo
6           Zurich
7           Frankfurt
8           Helsinki
9           Geneva
10         Singapore

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