TOKYO has emerged as the most expensive city in the world in a new study published today.

The Japanese capital has supplanted Hong Kong as the most costly place on the planet to work and live, according to the latest survey of 144 cities by the Mercer Human Resource Consultancy.

Moscow ranks second, followed by Osaka and Hong Kong. London remains by far the most expensive city in the EU, rising last year to seventh on Mercer’s global list.

The weakening of the US dollar against the euro means New York has tumbled three places to tenth in a survey that measures the comparative costs of more than 200 items in each location.

Mercers said the gap between the world’s most and least expensive cities has continued to close. But London remains almost three times dearer in terms of accommodation, food and travel than Asuncion, Paraguay.

Yvonne Traber, senior researcher, said accommodation and transportation costs in London, together with duty on items such as alcohol and tobacco, were particularly high compared with the rest of the EU. London’s smokers pay more for their habit than the denizens of any other EU city, with a pack of 20 cigarettes costing €6.54 (£4.67). That compares with €3.3 in Rome. Addicts should move to Lisbon where the same pack retails for €2.05.

Beer drinkers may take solace from the fact that their favourite tipple costs more in both Dublin and Stockholm. But the inhabitants of ten EU capitals pay less than half the London cost of €1.22 for a half pint of lager, with Lisbon again cheapest.