Expensive cities in Western Europe - Highest wages in Scandinavia and the US

• As the dollar dropped sharply, bargains abound in the US

• Oslo, London and Copenhagen are still the three most expensive cities, Dublin has jumped to the fourth spot

• Highest purchasing power still awarded to Zurich

Since UBS conducted its last comprehensive global survey of prices and earnings, in early 2006, there has been a dramatic shift in the relative values of currencies. And as exchange rates move, so do relative price levels around the world. The new UBS study 'Prices and Earnings' updates the detailed statistics on living costs from its 2006 survey to reflect most recent movements in exchange rates and inflation.

New hot spots for international shoppers
The sharply declining relative value of the US dollar has pushed US cities down in our global price rankings, and a shopping trip to the US is now an attractive proposition for Europeans. Similarly, Hong Kong is now 18% cheaper than Barcelona, where inflation and a strong euro have driven prices higher. South Africa and Indonesia are more attractive tourist destinations now, as their currencies have depreciated. Shanghai and Beijing, meanwhile, remain comparatively inexpensive despite China's economic boom and rising inflation.

Zurich's workers take home the most, after tax and social security deductions
In addition to accounting for exchange rates and inflation, the recalculated "Prices and Earnings" index also recognizes that a slice of economic growth is passed on to the workforce in the form of real wage increases. In the updated study, the highest gross wages are paid in Scandinavia. But once taxes and social security are accounted for, it is workers in Zurich and Dublin who retain the greatest share of their wages.

EU newcomers have lower purchasing power than Western Europeans
Eastern European cities all rank in the lower half of our purchasing power ranking, as inflation has erased some of their strong wage gains. In a global comparison, net purchasing power is highest in Swiss cities and in Luxembourg. Berlin ranks high in terms of hourly purchasing power. However, as is the case in many European cities, less time spent at work than in Asia or the US leaves the German capital only at the low end of the top one-third of our purchasing power ranking when we use yearly wages.