Living in London is cheaper than in New York for the first time in seven years, researchers said today.

Swinging exchange rates have driven down the relative cost of living in the UK, with London falling below the Big Apple in a table ranking cities' cost of living for the first time since 2002.

The plunging pound is behind the capital's slide from eighth place to joint 27th in under six months, according to the Economist Intelligence Unit which conducted the survey of 140 cities.

Meanwhile, New York climbed the table, up to 23rd place from 39th.

The faltering British currency also led Manchester to be ranked among the cheapest cities in Western Europe, dropping from 49th to 70th.

The move puts the city alongside Dakar in Senegal, and behind Reykjavik which was 67th after the Icelandic currency collapsed.

Tokyo dislodged Norwegian capital Oslo to become the most expensive city, closely followed by another Japanese city, Osaka, as the yen strengthened.

As European currencies declined, the strong dollar meant US cities, and those in countries in which the currency is tied to the dollar, shot up the table.

Lower-cost cities were less affected by the changing exchange rates, with little movement among those ranked the cheapest places to live.

The report's editor Jon Copestake said: "Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities."

Both local prices and exchange rates affect the relative cost of living, but the latest survey highlights the impact of exchange rates as it was created by calculating how prices collected last September would compare at February's rates.

Mayor of London Boris Johnson welcomed the findings about the cost of living in the capital - once ranked the third most expensive city to live in - as "timely and heartening".

He said: "We are working closely with (visitor organisation) Visit London to ensure that everyone from Seattle to Shanghai knows that there has never been a better time to visit London and get great value on every pound, dollar, euro or yuan spent here."

The Economist Intelligence Unit compares prices and products in cities around the world for its biannual survey, designed to allow companies to work out appropriate allowances for executives sent overseas. It does not look at the costs of housing and accommodation.

Top 10 cities

Rank (previous rank)

1 (6)Tokyo, Japan

2 (8)Osaka Kobe, Japan

3 (2)Paris, France

4 (3)Copenhagen, Denmark

5 (1)Oslo, Norway

6 (7)Zurich, Switzerland

7 (4) Frankfurt, Germany

7 (4)Helsinki, Finland

9 (12) Geneva, Switzerland

10 (15) Singapore, Singapore

Bottom 10 cities

121 (101) Pretoria, South Africa

124 (108) Asuncion, Paraguay

124 (65) Kiev, Ukraine

126 (126) Manila, Philippines

127 (126) Tripoli, Libya

128 (128) Kathmandu, Nepal

129 (129) New Delhi, India

130 (130) Mumbai, India

131 (131) Tehran, Iran

132 (132) Karachi, Pakistan