The latest reckoning from the provider of knowledge, information and technology for international reward programmes also shows that Europe more widely has taken a hit from the double whammy of a weaker German economy and a strong US dollar. ECA International’s ranking sees most major eurozone cities drop out of the top 100.By contrast, North American locations now account for almost a third of the top 100 most expensive, “overtaking previously dominant Asia”.

London calling?

ECA International’s latest Cost of Living report registers cities in the UK dropping eight places on average over the last 12 months, with Central London (140^th) posting its lowest ever position in the global rankings.According to the report, continuing uncertainty surrounding Brexit and the fallout from the US-China trade war has had a negative impact on value of the pound, making it cheaper for visitors and international expats working and living in the UK.The flipside is that it is now more expensive for British expats to travel to the US, Australia and certain non-eurozone locations.Says Steven Kilfedder, Production Manager at ECA International: “The UK is the cheapest it has been for foreign workers, but figures suggest that this is not leading to an influx of investment because of the uncertainty over Brexit.“Meanwhile it has become more expensive for UK firms to send staff abroad. While uncertainty may decrease after the election and push up the value of pound, there could be years of complicated trade talks ahead so expect the UK to see more fluctuations in the ranking in years to come” 

European capitals also fall from the Top 100

Conversely, a weakened euro combined with slow growth - particularly in Germany, which narrowly avoided recession - has seen almost all eurozone locations drop in rankings.  Seven locations tumble out of the top 100, including major European cities such as The Hague, Lyon, Rome, Berlin and Munich. Ireland’s capital, Dublin, remains in the top 100 (87^th), ahead of all UK cities including Central London (140^th), Edinburgh (156^th) and Manchester (162^nd), despite tumbling ten places on last year.There were some price-hike hotspots with Europe, however. These were mainly outside the eurozone. Russian and Ukrainian locations registered big rises. Kiev (198^th) witnessed the biggest increase in Europe, rising 38 places over the last 12 months, while Moscow (114^th) and St Petersburg (168^th) increased their ranking 29 and 24 places respectively.Switzerland continues to have the highest cost of living in Europe with four locations in the top ten.

North America dominates top 100 most expensive locations in the world 

The continuing strength of the US dollar has seen all locations in the US increase by an average of 18 places, with New York (15^th) and Honolulu (20^th) in Hawaii both entering the global top 20.There are now 28 US locations in the top 100, compared to just five in 2014.Canadian locations also saw big increases, rising 20 places on average with Vancouver (91^st) and Ottawa (96^th) returning to the top 100.Toronto (101^st) and Montreal (124^th) remain outside the top 100 but did increase 23 and 12 places respectively.North America now accounts for almost a third of the top 100 most expensive locations in the world with 30 cities located in either the USA or Canada overtaking Asia, which has 28.“The strength of the US dollar has made the US more expensive for workers and businesses looking to move to the country with 28 cities in the top 100,” continues Mr Kilfedder.“On the other hand, US companies are benefitting from the cheaper cost of sending staff abroad to locations in Europe and China.”

Global comparison sees Asia weigh-in as second most costly for expatriates

Cost of living in Hong Kong remains steady, retaining its position as the sixth costliest location in the world.However, the region has slipped from second to third in Asia following a strong performance by the yen, seeing Tokyo rise six places to second place globally.Meanwhile, Singapore, frequently seen as a rival to Hong Kong’s claim as being Asia’s premier financial hub, saw its ranking increase five places to 13^th, eleven places higher than five years ago in 2014.Kilfedder said: “Hong Kong’s place in the rankings has remained stable this year with the city continuing to be the sixth most expensive location in the world for expatriates.”“Despite the ongoing socio-political upheavals and the fact that the economy is in recession, we have yet to see a real impact in the cost of living in the city. Inflation remains high relative to many other locations that occupy the upper reaches of our rankings. “Indeed, Hong Kong has only been overtaken by Tokyo due to the strong performance of the Japanese yen throughout 2019, which has moved many Japanese cities up the rankings.“We expect prices in Japan to increase further owing to the recent increase in consumption tax while next year’s Olympics in Tokyo are likely to have further inflationary effects. As such, we expect Tokyo to remain above Hong Kong into 2020,” added Kilfedder.

Cost of living in Thailand increases - Bangkok enters top 50 for the first time

A strong performance by the baht has seen all Thai locations increase by an average of 42 places, with Bangkok rising 43 places to 47^th. This continues an upwards trend in cost of living which has seen the Thai capital rise 114 places in the last five years.“Bangkok, long seen as a cheap destination for holidaymakers and businesses alike, has seen a huge rise in the cost of living for people from other countries over the past few years,” explained Mr Kilfedder. “The strong economy has pushed up the value of the Thai baht and made the country more expensive for expatriates. “We have seen Thai cities moving significantly up the rankings over the past few years; Bangkok has moved up 75 places in the last two years alone and Chiang Mai has moved up 56 places in the same period.”

For more news and features, see our International Assignments section. 

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