London is still the most expensive city in Europe due to costly transport and housing, a new study has found.

The British capital dropped a place to third in the annual survey of 144 cities, after Tokyo and Osaka in Japan and followed by Moscow.

Mercer Human Resource Consulting found Glasgow (40th) and Birmingham (47th) were UK cities with slightly lower living costs.

New York remains the most expensive place in North America, and 13th over all.

Four of the world's costliest cities are in Asia, with Seoul (5th) and Hong Kong (9th) also among the top ten.

Asuncion in Paraguay, South America, is the cheapest city.

The survey compared prices of over 200 items, such as food, housing, transport, clothing and entertainment.

"Steep accommodation and transport costs together with the appreciation of the pound against the US dollar have contributed to the London's high ranking," said Marie-Laurence Sepede, research manager at Mercer.