London becomes fourth most expensive city in the world: Rent, petrol and cooking oil drive cost of living
A perfect storm of rising inflation, the war in Ukraine and soaring house prices and rent, have turned London in to a pressure cooker of expense, making it the fourth most costly place to live in the world.
London move up one place according to new research about cost of living for expatriates around the world, by mobility group ECA.
Last month, inflation rose to nine per cent and looks set to hit double digits, while interest rates were upped to one per cent.
The study uses metrics in a ‘cost of living basket, such as a cup of coffee, tomatoes, cooking oil, rent and petrol, highlighting how major population centres have been impacted by drivers of the cost of living, such as war, shortages and fuel price-rises.
Key indicators of the spike in expenses include the price of cooking oil, up 25 per cent globally but only four per cent in Britain.
The war in Ukraine has led to a shortage of cooking oil in the UK, leading to some fish and chips outlets to struggle, even asking Norwegian neighbours for more fish, while industry leaders said they felt “abandoned” by the UK government.
“The rise of cooking oil prices has not been very significant in the UK so far, but the impact is likely to be felt later in the year” said Steven Kilfedder, production manager at ECA International. “We’ve already seen some retailers impose restrictions on the number of bottles of oil per customer to manage limited supplies.”
Rent and petrol
According to the data, London rents are up by 20 per cent, while New York, which is ranked second on the overall list, had a 12 per cent spike.
London motorists are paying 23 per cent more for their petrol than last year, with it surpassing an average of £100 a litre today, with diesel passing that grim milestone earlier in the week.
The most expensive place to fill up your tank is Hong Kong, where a it will set gas-guzzlers back a cool £2.26 per litre, up £1.87 from last year.
War in Ukraine
The war in Ukraine has had a devastating effect on Russia’s economy – and many European countries which have had to find alternative fuel sources.
Many counties are also struggling with soaring prices for food, and in particular grain and wheat, with Russia preventing its export in a bid to put continued economic pressure on Kyiv.
The result has been a 37 per cent rise in fuel globally year-on-year, in addition to cooking oil prices increasing by an average of 25 per cent, owing to shortages.
Russian cities have however not suffered as much as it was perhaps, despite prices soaring 17 per cent in the sanctions-hit capital Moscow. The Kremlin’s seat fell just one place to 62nd most expensive, owing to a weak rouble.
Kilfedder commented that “as sanctions on Russia start to hit, imports have become scarce and costs have risen significantly and are likely to rise further. While the currency fell in the survey period, capital controls to stop money fleeing the country, have stopped the slide of the rouble.
“The full, long-term impact of the war and foreign businesses pulling out of Russia on the cost of living in the country will likely not become apparent for some time.”
Most expensive and cheapest outside of London and UK
While London is the UK’s major economic hub, UK cities rose up the rankings by an average of six.
Edinburgh is now 83rd, Manchester 84th, Birmingham entered the top 100 in 99th, while the Welsh and Northern Irish capitals Cardiff and Belfast were 101st and 106th
Outside of the UK, Hong Kong, New York and Geneva are the three cities which are ahead of London in the list, with the former maintaining the top spot, and the latter rising from fourth in 2021.
Tokyo on the other hand dropped to five from second place last year, but did have the highest inflation rate in three decades, due to the Yen remaining weaker than other currencies.
Israel’s coastal hub Tel Aviv climbed to sixth place, but its strong currency and high-tech economy helped weather the impact of the pandemic.
The city’s shift to more remote working made it a hub for international companies and a target for foreign investors, including with a post-Brexit Britain, and the Gulf, following the signing of a number of agreements, including with the UAE.
Istanbul however was one of the cheapest major cities in the world to live in, sitting at 203rd on the list, dropping 42 places.