The pound’s strengthening against the dollar has increased the cost of living in London, Birmingham and Aberdeen, which have moved up the ranks of the world’s most expensive cities.
Hong Kong is the world’s most expensive city for expatriates, followed by Tokyo, Zurich, Singapore and Seoul, according to a cost of living survey, which ranks 209 cities on the cost of a basket of more than 200 goods and services such as coffee, bread, milk, cinema and rent.
There are no UK cities in the top 10, but London made it back into the top 20, rising 10 places to 19th. Birmingham moved up 19 spots to 128th, Aberdeen 12 places to 134th and Belfast jumped eighteen spots to 152th.
Kate Fitzpatrick, the UK head at Mercer, the consultancy behind the survey, said: “UK cities’ rise in this year’s ranking is mainly due to a strengthening of the pound against the US dollar.” After falling in the wake of the Brexit referendum, the pound had risen by around 14% against the dollar between March 2017 and March 2018, when the survey was conducted.
Fitzpatrick added that a drop in London rent costs held back London’s rise up the rankings.
Hong Kong has regained the top spot in the ranking from Luanda, now in sixth place due in part to a decline in the Angolan capital’s housing market, which has lowered rental costs. Hong Kong also came top in 2016.
Expats pay the highest rent in Hong Kong – £5,486 per month for a two-bedroom unfurnished apartment “of international standards in an appropriate neighbourhood,” and £9,600 for a three-bedroom house.
This compares with £3,100 a month in London for a two-bed flat and £5,000 for a three-bed house; while in New York it costs £4,076 to rent a flat and £6,793 to rent a house; in Luanda, which has a limited supply of the type of housing favoured by expats, rent is £3,647 for a flat and £7,866 for a house.
German cities experienced some of the biggest moves in the ranking, due to rising rents and the strengthening of the euro against the dollar. Frankfurt (68th) and Berlin (71th) both jumped 49 spots while Munich (57th) climbed 41 places.
Mercer’s 2018 cost of living ranking shows that a cup of coffee, including service, costs £5.54 in Hong Kong, £4.52 in Zurich, £2.80 in London, £2.52 in Tokyo and £1.75 in New York.
A pair of blue jeans costs, on average, £104.34 in Buenos Aires, £102.76 in Johannesburg, £107.09 in Dubai and £85 in London, but only £41.48 in New York.
A cinema ticket for an international movie is more expensive in London than any other city, costing £16.79. This compared with £11.92 in Tokyo, £12.39 in Sydney, £12.15 in New York, £10.52 in Hong Kong and £14.55 in Zurich.
In the survey New York was used as the base city for all comparisons, and currency movements were measured against the US dollar.