Economic problems and growth in emerging markets have seen cities in Europe become cheaper in the past year and "relatively stable" in the UK, according to a new report here Monday.
A study of transport, utilities, food, clothing and other items in 131 cities across the world showed that Tokyo was the most expensive for cost of living.
London moved up one place to 16, while Manchester, northern England, jumped six to 47, the study by the specialised publication, the "Economist Intelligence Unit" found.
London was the third most expensive city three years ago, and Manchester was 28 in the table.
Jon Copestake, editor of the report, said: "The cost of living in Europe has seen relative declines thanks to economic austerity and currency fears.
"Asian cities have also been rising on the back of wage growth and economic optimism.
This means that over half of the 20 most expensive cities now hail from Asia and Australasia." Cities in Australia have jumped up the list, with Sydney now the third most expensive city in the world, and Melbourne in fifth place.
The least expensive cities included Mumbai and New Delhi in India, Kathmandu in Nepal and Algiers in Algeria.