London the most costly city in EU

SHOPPERS in London will have little to cheer about today after the city emerged as the most expensive in the European Union. Londoners pay more for an average basket of groceries, washing products and domestic services than residents of other EU cities.

A beer, for example, costs around 91p in a London supermarket compared with 66p in Stockholm and 37p in Paris. And other everyday products, such as spaghetti and olive oil, are also far cheaper abroad.

London is now the eighth most expensive city in the world, according to the Economist Intelligence Unit's Worldwide Cost of Living Survey, dropping from sixth place last year. Harare, in Zimbabwe, has surged into the top 10, above London, thanks to its rocky economy and 100% inflation rate.

The survey found the most expensive city is Tokyo, followed by another Japanese centre, Osaka. In Europe, the only city more costly than London is Oslo - which is not in the European Union. For those searching for a cheap trip abroad, Tehran, the capital of Iran, is the best option.

The Economist Intelligence Unit does have some good news though. New York is, for the first time, a more expensive place to live than London. But experts believe this is simply down to exchange rates.

Bob Ridgers, the editor of the survey, said: 'The fact London has dropped two places in the survey does not really mean prices are dipping. It is only a slight drop, which means it has more to do with exchange rates. People can still go to Europe and get a great deal in the eurozone. There is great value over there.'

The survey found that for consumers hunting a bargain within Europe, the best place to head for was Lisbon. The Portuguese capital is way down at 98 on the list, cheaper even than Guatemala, in Central America, and Istanbul, in Turkey.