Fluctuations in the rate of exchange between the euro and the dollar have caused a general increase in the cost of living in European cities – and Lisbon has risen in the world ranking from 94th position in 2003, to 71st this year. This rise also reflects the price increases that the Portuguese have felt over the last few years since the introduction of the euro. However, despite this, the capital remains one of the 10 cheapest cities in Europe.
By contrast, London is by far the most expensive city in Europe. Thanks to increases in house prices and transportation costs, and the value of the pound compared to the dollar, the British capital is the world’s second most expensive city, after Tokyo in Japan. Experts believe that the recent enlargement of the European Union will also have an effect on the rankings. “Looking to the future, we may see the cities of the new member countries rising in the rankings,” says Marie-Laurence Sepede, of Mercer Human Resource Consulting, adding that it is “on a par with the increased investment in commercial development and improvement in the quality of living”.
In the US, a drop in the value of the dollar has caused a general drop in the cost of living. According to the report, even New York, the most expensive city in the country, has become a more affordable place to live.