London turns world's most expensive city

London has overtaken Hong Kong as the world's most expensive city to live and work in, as a new study has suggested it has turned nearly twice as pricey as Sydney and four times more expensive than Rio de Janeiro. India's Mumbai was found to be at the bottom of the 12 most expensive cities report.

The combined typical cost of renting accommodation and leasing an office to work for a year in London had risen to almost 74,000 pounds per employee. That puts the British capital city well ahead of other global hubs such as New York, Paris and Tokyo, the Guardian Tuesday quoted estate agent Savills as saying.

Savills' 12 Cities report is designed to help companies assess the costs of relocating employees. It measures the total cost per employee in US dollars of renting living and working space in some of the world's global hubs.

The annual cost per employee in London was put at $120,568 (73,800 pounds), with Hong Kong close behind at $115,717. New York and Paris were in third and fourth place, at $107,782 and $105,550 respectively. Sydney came eighth at $63,630, Shanghai 10th at $43,171 and Rio 11th at $32,179. Mumbai was bottom of the table at $29,742 (about Rs.18,13,000).

London's rise to first place in the rankings was blamed on the big increases in office rents, plus the pound's strength against the dollar, prompting Savills to warn that it risks becoming less competitive as a result.

Whereas falling residential rents and a weakening currency contributed to Hong Kong, which had previously topped the ranking five years running, dropping to second place.