LONDON has lost its status as Europe’s most expensive city in which to live, overtaken by Moscow, a global survey reveals today.

The Russian capital was found to be the costliest city on the planet by Mercer, the human resource consultants, who said that it was 12 per cent dearer to live in than London and nearly 25 per cent more expensive than New York City.

Steeply rising property prices were behind the rise of Moscow, up from fourth place in last year’s table. It was followed in the list by Seoul and then Tokyo, which was the costliest city in the world last year. London came fifth, down by two places from 2005, thanks to a softening of sterling against the dollar compared with a year ago.

London was overtaken by Hong Kong, which rose from ninth place to fourth and which led a trio of Chinese cities in the top 20. Beijing was at No 14 and Shanghai at No 20. Glasgow was 60th in the poll and Birmingham 69th, both well down from last year.

The cheapest leading city to live in in the world was Asunción, the capital of Paraguay, where living costs were just one third of those in Moscow.

Rebecca Powers, a senior consultant at Mercer, said: “We have seen significant shifts in the cost-of-living rankings over the past few years, reflecting a changing global market. For many companies, it can now be more expensive to send employees to work in Russia or Korea than places like Japan or Switzerland, which are often perceived to be more costly.”

The survey covers 144 cities across six continents and measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

After Moscow and London, the costliest European cities were Geneva, Copenhagen, Zurich and Oslo, which tied with New York for tenth place. St Petersburg rose to No 12, from No 15 last year.

The biggest rise in the table was São Paulo, in Brazil, which climbed 85 points over the year to reach 34th place. The city had previously been a third cheaper than New York, the survey’s benchmark, but this year was only 15 per cent behind it.

Leipzig, the German city listed as Europe’s cheapest by the survey, suffered the worst fall, dropping by 38 points to 123rd place.

Figures for selected cities showed that London has the costliest bus or underground tickets of the world’s main cities.

Among the 20 selected venues, the cost of renting a bedroom was dearer in London than anywhere else except New York.

TOP TEN

1 (4 last year) Moscow
2 (5) Seoul
3 (1) Tokyo
4 (9) Hong Kong
5 (3) London
6 (2) Osaka
7 (6) Geneva
8 (8) Copenhagen
9 (7) Zurich
10 (10) Oslo
Source: Mercer Human Resources Consulting

Times Recommends

• Times Charity Appeal: SolarAid
• Is it Black Monday all over again for Dubai?
• Behind the scenes at the biggest deal