Nearly every American returning from London these days has a horror story about the lopsided exchange rate between the dollar and the pound. From a night at The Savoy to a shopping expedition at Harvey Nichols, the average price of most goods and services is higher, often much higher, than in the States.
While it's bad for visitors from the U.S., London is hardly a bargain for locals either--they regularly complain about the high price of gasoline, tobacco, rent, food, computers, you name it. Fortunately for many Londoners, they at least have the highest gross domestic product in the European Union to help them cope with their living expenses.
According to a new report published by Eurostat, the Statistical Office of the European Communities, the inhabitants of inner London enjoy purchasing power that is 315 percent higher than the average for the European Union. In fact, of the 25 countries in the EU25, seven of the regions with GDP per capita of 125 percentor more were in the U.K.
Those regions with the second- and third-highest GDPs were the Bruxelles-Capitale region in Belgium, which had 234 percent of the average, and the Grand Duchy of Luxembourg, at 213 percent. All figures are based upon 2002 data.
Among the lowest were six regions in Poland, with the region of Lubelskie averaging only 32 percent. Other low scorers were in Hungary, the Czech Republic and Latvia.
Eurostat calculated the GDP by measuring and comparing three data sets:
a. Output approach
GDP is the sum of gross value added of the various institutional sectors or the various industries, plus taxes and less subsidies on products (which are not allocated to sectors and industries). It is also the balancing item in the total economy production account.
b. Expenditure approach
GDP is the sum of final uses of goods and services by resident institutional units (final consumption expenditure and gross capital formation), plus exports and minus imports of goods and services.
c. Income approach
GDP is the sum of uses in the total economy generation of income account: compensation of employees, taxes on production and imports less subsidies, gross operating surplus and mixed income of the total economy.
To see a list of the European countries with the ten highest regional GDP per capita, click here.
