Business

London is the 2nd most expensive city in the world for the rich

Boosted by the buying power of family offices, London has roared into life to become the second most expensive city for the rich, according to advisory firm Julius Baer.

During the pandemic last year, London came eighth. Now, in a stunning return to form, it is second to top-placed Shanghai, according to Baer’s newly-published growth and lifestyle index. New York was placed eleventh, partly due to the strength of the dollar.

Hotel suites are the most expensive item on Baer’s shopping list, in dollar terms, after a 225% rise in prices making hotel rates 162% more expensive than the global average.

London is the most costly place in the world to hire a lawyer, following an eye-watering 50% rise in fee scales, against a global average of 32.6%. London charges the highest prices for eye surgery (up 4%) and MBA qualifications (7%). 

It is the second most expensive city to buy a bicycle following a 37% rise in prices and third most expensive residential property (5%) Technology costs rank fourth in the world, following a rise of 38%. 

The costs where London ranks more cheaply include purchases of wine, following a change in vintage, where prices have fallen -31%, health insurance (-22%,) ladies’ handbags (up 3%) and mens’ suits (2%). 

To an extent, London’s rising prices reflect a recovery from the pandemic, leading to crowded streets, higher prices and a shortage of goods as supply chains struggle. Prices rose in aggregate in every city in the index with the exception of Manila, facing political controversy and climate extremes.

Inflation in the UK is now rising faster than in other parts of the world. The overall price of goods in the Baer lifestyle index is up 7.5% in a year. Caution by the Bank of England in raising interest rates, plus political controversy, has pushed down sterling and attracted tourists.

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