London climbed three places to second in Mercer Human Resource Consulting's 2007 Cost of Living study.
Asian cities Seoul, Tokyo and Hong Kong completed the top five. Paraguay's capital Asuncion was the cheapest.

Mercer senior consultant Rebecca Powers said there had been significant changes since the 2006 rankings of the annual survey.
"These are primarily due to exchange rate fluctuations - in particular, the weakening of the US dollar and strengthening of the Euro," she said.
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