London living cost falls to lowest level in decades in international ranking

The study, conducted by The Economist Intelligence Unit, found that Manchester fell 25 places to 51st spot – the steepest decline of any city surveyed this year

London’s dramatic fall down the ranks means that it is now 17 per cent cheaper than Paris and on a par with Dublin, according to the survey (Reuters)

Living in London is cheaper now than it has been in decades, at least by one measure.

An analysis of the cost of a basket of over 150 goods in 133 cities around the world has found that London has fallen 18 places in the global cost of living ranking to 24th this year, its lowest spot in two decades.

The study, conducted by The Economist Intelligence Unit, also found that Manchester fell 25 places to 51st spot – the steepest decline of any city surveyed this year.

“Intense competition among British retailers accompanied by low oil and commodity prices has kept significant rises in check over the last few years” said Jon Copestake, who edited the survey.

He added, however, that as a result of rising import prices, British shoppers will likely start noticing higher levels of inflation, “even as businesses potentially benefit from inbound retail tourism and cross border trade”.

The rate of consumer price inflation was 1.8 per cent in January and is widely expected to rise above the Bank of England’s official 2 per cent target in the coming months, signalling a period of negative real wage growth for households.

London’s dramatic fall down the ranks means that it is now 17 per cent cheaper than Paris and on a par with Dublin, according to the survey.

For the first time in 15 years, the cost of living in London is also cheaper than the cost of living in New York, it found.

Other cities that saw costs tumble included Buenos Aires, which fell 20 places to 82nd in the ranking, something that the EIU attributes to ongoing economic volatility in Argentina.

Back in the UK, Manchester is now less expensive to live in than Beijing and its cost of living is on a par with that of Bangkok.

As they had in previous years, Asian cities dominated the upper echelons of the ranking this year, taking five of the six top spots.

Singapore was the most expensive of those, with Zurich being crowned most expensive European city, and third place overall, trailing Hong Kong.

New York was the only North American city to make it into the top ten while Lagos, in Nigeria, and Almaty, in Kazakhstan, were named the two cheapest cities in the world.