London beating New York

London is still the global economy's most influential city but is facing a challenge from cities in Asia and eastern Europe.

According to MasterCard, which has compiled an index to rank major financial hubs around the world, London beat New York and Tokyo into second and third place respectively.

MasterCard said the city significantly outperforms its rivals in most dimensions - with 'livability' (quality of life factors) as "the most prominent area for improvement when compared to other top cities".

Shanghai had the largest jump in overall rank – moving eight spots from 2007 to 2008 – bringing it into the top 25 of this year's index and demonstrating the growing importance of Asian cities to a progressively urbanized global economy.

Moscow, a gateway for the fast-growing eastern European region, showed the greatest improvement in actual index scores and had the most significant gain on London year-over-year.

Dr. Michael Goldberg, program director for MasterCard Worldwide Centers of Commerce, said: "It's fascinating to note that the city whose score increased the most compared with London since last year is Moscow, followed by Singapore, Tel Aviv, Bogota and Mumbai – all cities in new or emerging markets – while no North American city advanced significantly in the Index this year," Goldberg adds.

Singapore is now ranked at fourth place, moving up two spots compared to last year, while Chicago and Hong Kong both moved down a position to five and six respectively in 2008.

Paris moved up to seven from its number eight ranking in 2007, replacing Frankfurt. Seoul retained ninth place, while Amsterdam moved into the number ten position from 11 in 2007, displacing Los Angeles, which slipped to 17 this year.

The cities were rated by their performance in seven key categories: legal and political framework; economic stability; ease of doing business; financial flow; business centre; knowledge creation and information flow; and livability.