UK cost of living for expats falls as Brexit hits pound value

A new study has found that London has become one of the cheapest major cities in Europe for overseas workers since the Brexit referendum. The weakened position of the pound has meant that the UK as a whole has also become one of cheapest countries in Europe for international employees and travellers

Corporates across the globe are increasingly facing costs related to talent needs as expansion into various key regions, coupled with increased talent scarcity, calls for shuffling staff across global cities. Understanding the cost of living in a broad sense, and in relation to the US dollar, allows organisations to better plan assignments and prepare their staff for the new situation.

While London retains a reputation for being one of the most expensive cities to live in in Europe, let alone the UK, recent studies have suggested that this is reversing, for expats at least. Hong Kong reigns as the most expensive city in the world for expats, followed by Tokyo and Zurich – but surprisingly London has seen costs fall over the last 20 years, according to a study earlier in 2018 by Mercer. Now another piece of research has further suggested that prices are falling for expats in the capital city, and the UK as a whole.

An analysis from global mobility expert, ECA International (ECA) has suggested that the weakened position of the pound following the 2016 Brexit referendum has seen the cost of living in UK cities become much lower for new arrivals than many in Europe, including population centres in France, Germany and Belgium. Those coming in from the US will also find the cost of living much cheaper in the UK thanks to the strength of the US dollar in comparison to the post-referendum pound.

ECA’s Cost of Living report analyses a basket of goods and services commonly purchased by international assignees in 479 locations worldwide. On the basis of the report’s rankings, the UK has dropped 81 places since the Brexit referendum according to ECA’s Cost of Living report which compares a basket of like-for-like consumer goods such as groceries, meats and vegetables, and essential household goods.

Commenting on the findings, Steven Kilfedder, Production Manager for ECA International, said, “The cost of living in the UK has dropped significantly for overseas workers and visitors since the referendum along with the value of the pound. With the UK’s leave date fast approaching, all that can be certain is there will be more fluctuation in inflation and exchange rates as the nature of future relationships becomes clearer.”