The gap between the world’s most and least expensive cities has narrowed only marginally this year, by less than two points compared to four points last year and 15 points in 2002.

The survey covers 144 cities and measures the comparative cost of over 200 items in each location. These include housing, food, clothing and household goods as well as transportation and entertainment.

London is the most expensive city in Europe, with a score of 119. High accommodation and transport costs together with the appreciation of the pound against the US dollar have pushed the city up in the rankings. However, Mrs Sepede said, “The scores are based on the cost of living for expatriates, who are more likely to stay in Central London where accommodation is most expensive.”

Glasgow and Birmingham rank lower in the UK at positions 41 and 51 respectively (scores 84.1 and 82.8).

After London, Geneva is the next most expensive city in Europe ranked in 6th position (106.2) followed by Copenhagen in 8th place (102.2). Other high scoring cities include Zurich ranked 9th (101.6), Milan ranked 13th (98.7), Dublin in 14th place (96.9), Oslo in 15th place (96.2) and Paris in 17th position (94.8).

Mrs Sepede said, “Since the Euro was introduced in 2002, many European cities have moved up in the rankings.”

At the other extreme, three of the five cheapest European cities are in countries that gained EU accession in May. Bucharest in Romania is the least expensive European city ranked 129 (60.1) followed by Limassol in Cyprus in 95th place (70.3).

Mrs Sepede commented, “Looking ahead, we are likely to see cities in the new EU accession countries rise in the rankings, as more investment is made in commercial development and standards of living increase.”