Tokyo is the most expensive city in the world, followed by Oslo, which has moved from 6th to 2nd position in just one year, according to the study by British consultancy ECA.
Geneva is in 3rd place, Zurich in 5th, Bern in 7th and Basel in 9th. The biggest jump from last year was made by Geneva, which ranked 8th in 2010, although all of the Swiss cities have climbed the rankings.
ECA points out that the the strength of the franc goes some way to explaining Switzerland's dominance on the list. Only Japan has as many cities towards the top of the rankings (Tokyo, Nagoya, Yokohama and Kobe).
While Swiss cities may be among the most expensive in the world, a recent study also showed that they lead the rankings for the highest quality. Zurich, Geneva and Bern were in the top ten of the 2011Worldwide Quality of Living Survey carried out by consulting company Mercer.
Despite turmoil in the eurozone, the euro has strengthened on average against other major currencies over the last year. As a result, eurozone cities have risen in the ranking, while those in the US, for example, have fallen.
The ECA report is used by global companies to help decide on wages and benefit packages for their overseas employees. Most of the research is carried out locally and the raw findings are later translated into US dollars, meaning any changes in the ranking are as much the result of currency fluctuations as of price inflation.
For example, the cost of living in European cities becomes more expensive if the dollar weakens, even when local prices remain unchanged.