A bus or tram journey is £1.45 regardless of distance, but in Manchester a tram journey is over £3, in Birmingham over £2, in Edinburgh £1.50.
London's tickets are also much better integrated -- only a couple of express train services to airports have special fares, and they all have non-express, cheaper alternatives.
Among international big capitals (which is what you can really compare London to) it has to be the worst. The fact that going to other cities in the UK is prohibitive makes it even worse (it's cheaper to fly to many places in Europe than going to most other UK cities by any means of transportation). If you want to move medium distances within London in reasonable time, it's tube/Overground/DLR and it's prohibitive. Using the Oyster card it's better but still rubbish really.
http://www.theregister.co.uk/2007/01/04/most_expensive_train...
Like many European cities, paying by cash is being phased out. It's annoying for visitors, but London is ahead here: Oyster cards are refundable, let the user go overdrawn (into the deposit), and contactless credit/debit cards are accepted.
The actual Zone 1 fare is £2.20. A central zone Berlin ticket is €2.60. Copenhagen ~£2.60. Munich €2.60.
A bus is a terribly ineffective way to move around London, especially for commuting to/from the center.
A single fare tube ride is 2.20 in Zone 1, escalating quickly with distance.