Julius Baer report: currency, not inflation, is driving up the cost of living well

The cost of maintaining a premium standard of living rose by 10.2% in US dollar terms over the past year, according to the Global Wealth and Lifestyle Report 2026 published by Julius Baer on 7 July. The Swiss private bank attributes much of that rise to currency movements rather than local price inflation, a distinction that matters for globally mobile families and the offices that advise them.

The report’s Lifestyle Index tracks a basket of 20 goods and services across 25 cities. Singapore holds first place for a fourth consecutive year, helped by expensive residential property, high car costs and a strong Singapore dollar. Zurich climbs three places to second, driven by the appreciation of the Swiss franc against the dollar. Monaco enters the top three for the first time, supported by euro strength and its residential property prices. Hong Kong falls to fourth and London to fifth, after London came close to the top spot in 2025.

The pattern reflects exchange rates as much as anything local. Cities tied to the franc and the euro moved up the table, while those aligned with the dollar lost ground. European cities saw prices rise 14.1% in dollar terms, well above the global average, with Zurich, Monaco, Paris, Milan and Frankfurt all climbing. Asia Pacific, where prices rose 7.4%, kept five cities in the top ten, and Sydney was the year’s biggest climber, up six places to eighth. Dubai slipped to 14th, a shift the bank puts down to the dirham’s peg to the dollar rather than to the city becoming cheaper. For the first time in three years, no city in the Americas made the global top ten, with New York the highest-placed in the region.

Raw materials also fed into the numbers. Gold has more than doubled in price since 2024, pushing jewellery up 16.4% and watches up 15.5%. Luxury goods rose 12.3% on average, which the report links to input costs, skilled labour and the pricing decisions of European luxury houses that anchor their prices in stronger currencies. “Currency, once again, is at the forefront,” said Christian Gattiker, Head of Research at Julius Baer. “But it is the interaction between currencies, assets, and behaviour that defines the real story.”

The accompanying Lifestyle Survey found geopolitical concern close to universal, with between 82% and 95% of respondents in each region worried about it. That anxiety is showing up in behaviour. At least one in three respondents have changed where they buy some luxury goods, more than half would travel abroad to buy and sidestep tariffs, and around a quarter already do. Spending has split into what the report calls a two-speed luxury economy, with APAC and the Middle East outpacing Europe, North America and Latin America. Health spending rose in every region, one of only two categories, alongside leisure travel, to do so.

Portfolios have moved too. Most respondents said they had adjusted their holdings in response to macroeconomic and political risk, favouring precious metals, geographic diversification and higher liquidity. APAC investors led the shift, with 73% increasing diversification. The bank notes that its data was collected before the recent escalation in the Middle East, so those events are not reflected in the findings.

For a family office, the headline number is less useful than what sits underneath it. Where a family lives, which currency it holds its wealth in, and where it buys are now among the larger swing factors in what its lifestyle actually costs. The report is available in full at Julius Baer.