The study by the Economist Intelligence Unit found that British cities have dropped to their cheapest levels internationally since at least the 1990s. It said the sharp fall in the pound after the EU referendum – still more than 6% lower than it was on the eve of the vote – had sent London and Manchester sharply down the rankings.
Analysing a basket of more than 150 goods in 133 cities around the world, the report found London was now almost a third cheaper than Paris to visit, and almost a 10th cheaper than Dublin. The UK capital fell six places to 30th in the rankings for the most expensive city in Europe, while Manchester dropped five places to 56.
Singapore retained the title as the world’s most expensive city for a fifth year running, while Paris and Zurich topped the list in Europe.
Roxana Slavcheva, the editor of the report, said: “Rising import prices mean British shoppers will notice higher levels of inflation, even as businesses potentially benefit from inbound retail tourism and cross border trade.”
While the weakness in sterling has created opportunities for UK retail tourism, it has pushed up the cost of living for UK households already under pressure because of weak growth in pay, which has hit overall economic growth.
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