Like these rivals, the 208 uses a turbocharged 1.6-litre engine, which in this case sends 197bhp and 203lb ft of torque to the front wheels via a six-speed manual gearbox.
On top of this, Peugeot has given the GTi half-leather sports seats, 17-inch alloys, unique LED headlights, and various other sporty styling touches.
A starting price of 18,895 means it costs almost exactly the same as the Renaultsport Clio (which gets a dual-clutch automatic gearbox as standard) but nearly 2000 more than the Fiesta ST. Clearly, the hot 208 has a lot to prove.
Whats the 2013 Peugeot 208 GTi like to drive?
Fun and nimble, but not the last word in finesse.
The 208 GTi is defined by its engine, which feels a touch flat at low revs, before a stampede of power arrives as the turbo kicks in.
Plenty of buyers will enjoy this aggressive surge of acceleration, and it's a seriously quick car if you keep the engine in its sweet spot by making regular use of the slightly rubbery gearbox. However, the more linear delivery of the Fiesta ST makes its performance more accessible.
Elsewhere, changes over the regular 208 include wider tracks, firmer suspension, an 8mm drop in ride height and retuned steering, all of which combines to give the GTi the sort of sharp, thrilling handling hot hatch buyers expect.
The quick, light steering delivers predictable responses and weights up enough in corners to provide a sense of connection.
True, it's a tad disappointing how quickly the car runs out of grip; it lacks the torque-vectoring technology that aids tight cornering in some rivals. However, simply lifting off the throttle brings the nose back into line quickly and without drama.
There's also good feel through the brake pedal, which helps you apply just the right amount of pressure and goes a long way to making the 208 an easy thing to live with, whether you're thrashing it or just pottering around town.
Then there's the ride. Bigger ruts and bumps are soaked up effectively and with no harsh jarring, yet body movements are kept firmly in check.
With such a good balance between comfort and fun most of the time, few buyers will mind that the suspension is noisy and the ride a bit jittery at lower speeds.
Peugeot has kept exhaust noise to a minimum to further boost everyday usability, although it's a pity the 208 GTi doesn't sound a little naughtier when you drive it hard.
Whats the 2013 Peugeot 208 GTI like inside?
The biggest aggravation for most drivers will be the driving position, because the small steering wheel has to be set very low to stop it obscuring a good portion of the instruments.
Its even more of a shame when the rest of the cabin is such a success.
The low-set sports seat offer a good breadth of adjustment and loads of lateral support. Meanwhile, a crisp, red LED surround to the instrument binnacle matches red highlights on the seats, doors and on the rally-inspired steering wheel dead-ahead marker.
Rear passengers will be a bit squeezed for legroom by the bulky front seats, but otherwise the 208s classy interior goes a long way to making it feel worth the substantial price.
Should I buy one?
The 208 GTi isn't without flaws, but it delivers the speed and agility that youd expect given the hallowed GTi badge gracing its flanks.
Well have to get all the new hot hatches together on British roads before we can make the final call on which is best. However, the way the 208 blends fun with relaxed on-road manners and a classy, comfortable cabin definitely has appeal. Its the most complete hot Peugeot in decades.
What Car? says...
Engine size 1.6-litre turbo petrol
Price from 18,895
Torque 203lb ft
0-60mph 6.8 seconds
Top speed 143mph
Fuel economy 48mpg
CO2 emissions 139g/km
By Vicky Parrott