The latest cost of living report has revealed that London is so expensive due to the of high cost of rental accommodation.
The strength of the pound has also pushed London up the list, along with other British cities such as Edinburgh and Manchester. The pound rebounded this year, rising by 8 per cent against the US dollar, meaning that expatriates living in the UK may find goods and services to be more expensive.
Steven Kilfedder, production manager at ECA International, said: “The average rental prices for expatriates in the British capital are significantly higher than in the vast majority of its European neighbours, pushing London towards the top of the rankings.”
European cities have dominated rankings, making up 40 of the top 100 most expensive destinations in the world, due to a strong euro, pound and Swiss franc.
However, due to Covid, reduced travel has pushed some tourist cities down the list. Reykjavik has fallen to 63rd rank, due to lost tourist activity.
Kilfedder said: “The pandemic has decreased the need for housing and we’ve seen rents drop in many tourist locations such as Thailand, Vietnam and Turkey.”
Despite a global recession severely hitting developing economies, many African countries rose in the rankings. The strong euro has led countries with indexed currencies to move higher up the list. The Congolese city of Brazzaville, the continent’s most expensive city, rose 10 places and now ranks 19th.
Trade tensions, the lowering of oil prices, and the struggle to contain Covid have all driven the value of the dollar down, making some locations in the US more affordable for expatriates.