London's high transport and accommodation costs have pushed it up to second place in a list of the world's most expensive cities.

Tokyo remains top of the rankings by Mercer Human Resource Consulting, which many companies use to award allowances for expatriate workers.

The survey covers 144 cities around the world by comparing the cost of 200 different items.

London has shot up five places to second spot on the back of rising costs for transport and living in London.

Mercer also said costs had been affected by the appreciation of the pound against the US dollar.

"The scores are based on the cost of living for expatriates, who are more likely to stay in Central London where accommodation is most expensive," said Marie-Laurence Sepede, senior researcher at Mercer.

London is the only European city in the top five, with Geneva in 6th, Copenhagen in 8th, and Paris in 17th position.

The next UK cities in the list are Glasgow and Birmingham, ranked 41 and 51 respectively.

Asuncion in Paraguay was rated the cheapest city in the world, according to the survey.