Studies rank London’s cost of living from 10th to 58th most expensive in the world, but the new governor of The Bank of England must have read a different study.
What are the exact measurements needed to determine how much it costs to live in a city? With a wide variety of studies each using its own criteria, it’s no wonder that the results are just as varying.
- When London hosted the Summer Olympics in 2012, the TripIndex from travel authority, TripAdvisor, ranked London as the most expensive city in which to spend 24 hours (as a tourist). The average cost for a night out for two, they said, is US$531.79 (£330.45).
- List master, List25.com, says that for expat living London is the 25th most expensive city in the world, just a bit less expensive than Seoul, South Korea (22) and New York City (19). Tokyo, Japan, is their most expensive. They study examined exchange rates and lifestyle.
- Accounting and investment experts at Mercer also rank London at 25 and put Tokyo at number 1. Their study considers comparative costs between products and services such as transport, food, household goods and entertainment.
- Number jugglers Numbeo think the cost of living in London is 20% more expensive than New York City, excluding rent. Including rent, though, it’s only 6% more than NYC. Either way, their findings are contrary to each of the studies listed above.
- The Economist Intelligence Unit retains the services of human resource experts and line managers in order to gauge ‘compensation policies for relocating employees’. They base their comparisons on costs in New York City, and in their minds, London is the 17th most expensive city in the world. The study also say Zurich, not Tokyo, is number one.
- ECA International are advisors and service providers to companies with employees working overseas. According to their study, London’s position moved from 69th in 2011 to 58th in 2012. They also agree that Tokyo is the most expensive.
- Swiss financial services company UBS ranks London at number 10 (a bump from the 15th spot in 2011) and puts Oslo at the top, with Zurich at number 2 and Tokyo at number 3.
So all you can really know after reading the studies is that London is not the most expensive city in the world, nor is it the cheapest. That may not be as helpful as you were hoping.
What spurred this cost-of-living study analysis, however, is an article I read today from the BBC showing that The Bank of England is sending a clear message that London has a high cost of living, recently granting their newly appointed governor a record-high annual housing allowance of over US$400,000 (£250,000), on top of his salary of over US$1 million (£624,000). The governer is moving to London from Ottawa, Canada, and so as an expat, the housing allowance is meant to cover his lifestyle expenses and to be sure he can maintain his standard of living.
Keep in mind that he is a public official and in a position to have a direct impact on mortgage availability and interest rates set to the local populace.