Page last updated at 08:06 GMT, Thursday, 24 July 2008 09:06 UK

Moscow tops list of pricey cities

Moscow's Red Square
A cup of coffee in Red Square can be extremely expensive

Moscow has topped the league of most expensive cities for expatriates to live in for the third year running.

The research by human resources firm Mercer took account of expenses such as rent, eating out and petrol.

Moscow has particularly expensive coffee, with a cup in a cafe costing $10.40 (5.19) including service.

Tokyo climbed two spots into second place in the survey, followed by London, which dropped one place into third, and Oslo, which came fourth.

"Moscow's position as the most expensive place for expatriate living has been strengthened by the appreciation of the rouble against the US dollar and the continuous rising accommodation costs," said Yvonne Traber, a research manager at Mercer.

The survey compared the cost of 200 items in 143 cities. The three cheapest cities were Karachi in Pakistan, Quito in Ecuador and Asuncion in Paraguay.

Asuncion was the cheapest city for the sixth year running.

Currency impact

Mercer said that the weakening value of the US dollar had caused significant changes in the rankings.

"Although the traditionally expensive cities of Western Europe and Asia still feature in the top 20, cities in Eastern Europe, Brazil and India are creeping up the list," Ms Traber said.

"Conversely, some locations such as Stockholm and New York now appear less costly by comparison."

In the UK, as well as London slipping one place, Birmingham dropped from 41st to 66th, while Glasgow fell from 36th to 69th.

"In contrast to the strengthening euro and other European currencies, the British pound has remained relatively stable against the US dollar," said Ms Traber.

"As the cost of living in the eurozone has risen relative to the US, UK cities have declined in the rankings."

Graphic showing selected countries' respective showing on the Cost of Living index

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