THE collapse in oil prices and uncertainty over Brexit have sent Aberdeen plummeting down a global cost of living scale with the Granite City now ranking alongside the Rwandan capital of Kigali.

Mercer’s survey, which covers 209 cities across five continents, measures costs – including housing, transport, food, clothing, household goods and entertainment – in each location.

The study is designed to help multinational companies and governments determine salary and benefit packages for expatriate employees.

New York is used as the base against which all other cities are compared, with currency movements measured against the US dollar.

According to the survey, Aberdeen tumbled from 85th place last year to its current position of 146 – just above Kigali and below Lome in Togo.

Only the Egyptian capital of Cairo fared worse than Aberdeen but scored especially poorly after devaluing its currency to attract investment in the wake of political turmoil.

House prices in Aberdeen have dropped by a tenth in the space of a year which is the biggest property price drop anywhere in Britain as the area suffered an economic downturn due to the low price of oil which has cost around 10,000 jobs lost.

The area saw house prices slump by 10.2 per cent in the year to January 2017 to an average price of £163,176, down from £181,773 in January 2016.

Other UK cities such as Aberdeen, Birmingham and Glasgow have also tumbled down the rankings in Mercer’s 2017 Cost of Living Survey.

London remains one of the world’s most expensive cities for expatriate employees despite the weakening of the pound since the EU referendum but it was ranked at 30th place, falling 13 spots compared with last year.

Glasgow was placed 161st after falling 41 places and is ranked below Havana, Cuba, while Belfast was in 170th place after falling 36 spots and sits behind cities such as Harare in Zimbabwe.

The most expensive city in the world for ex-pats is the oil-rich Angolan capital of Luanda which reflects the huge cost of security in the region.

Hong Kong, Tokyo, Zurich and Singapore are next on the list while the cheapest city in the world to live is the Tunisian capital of Tunis followed by Bishkek in Kyrgystan.

Kate Fitzpatrick, Mercer’s Global Mobility Practice Leader for the UK & Ireland, said: “Aberdeen saw the second biggest drop in the overall global rankings, only behind Cairo, due to a significant softening in the housing market as a result of the slow-down in the energy sector.

“Currency fluctuations, including the weakening of both the British pound and the euro against the US dollar, have had a major impact on this year’s rankings.”

“As a result, many European cities have been driven down the ranking by around 10 to 20 places. However in some cases local conditions, for example availability of accommodation, have counter-balanced or exacerbated the impact of currency movements.”

Other Western European countries also fell in the rankings, mainly due to the weakening of local currencies against the US dollar.

Vienna at number 78 and Rome at 80 fell in the rankings by 24 and 22 spots, respectively.

James Bream, director of policy and research at Aberdeen & Grampian Chamber of Commerce, said: “That Aberdeen has fallen in the rankings shouldn’t be a surprise, all UK cities have.

“For sometime we’ve been investing in infrastructure, with £5.3billion planned, and having a place which is less costly to do business in and live may actually help us to be more globally competitive and help our efforts to diversify our economy.”