Moscow has been named the world's most expensive city once again this year, resisting a challenge from London for this dubious honour.

A new cost of living survey shows that Russia's capital city is the most financially crippling, due to expensive housing, costly transportation, expensive household goods and pricey entertainment.

Taking New York as the base city, the study from Mercer Human Resource Consulting examines the world's cities on an annual basis. Moscow now has a rating of 134.4, just ahead of London with 126.3. England's capital city seems determined to top this ignominious poll, however, with its rating up from just 110.6 last year.

Indeed, London has this year overtaken Hong Kong, Tokyo and Seoul to grab second position. Seoul is now the world's third most expensive city and Tokyo is down to fourth. Hong Kong has slipped to fifth, with a rating of 119.4.

"There have been some significant changes in the rankings since last year. These are primarily due to exchange rate fluctuations - in particular, the weakening of the US Dollar and strengthening of the Euro," said Rebecca Powers, a principal and senior consultant at Mercer.

"As companies continue to send employees on expatriate assignments, they must closely monitor changes in cost of living to ensure their expatriate compensation packages are fair and competitive," she added.

London's recent surge has been attributed to steep property rental costs, as well as the strengthening of the British pound against the US dollar. Accommodation is also the primary reason for Moscow's position at the top of the table.

European cities are now prominent in the cost of living survey, with Copenhagen, Geneva, Zurich and Oslo all in the top ten. Bulgaria's capital city Sofia is the least expensive city in Europe, with a rating of just 72.5.

At the other end of the scale, only New York and Los Angeles from the US are listed in the top 50 and many American cities have fallen dramatically over the last year.

Mercer's survey examines 143 cities in six continents.

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