The top two universities in the world are to be found in the UK, according to a new league table.

Oxford held on to first place in the latest annual Times Higher Education World University Rankings, with Cambridge rising from fourth place to take second.

It is the first time that the two prestigious institutions have taken the top two spots in the 13-year history of the rankings.

Overall, the rankings show Oxford in first place, followed by Cambridge and then the California Institute of Technology (Caltech), which drops one place to joint third with Stanford University.

Rounding off the top five is the Massachusetts Institute of Technology (MIT).

Times Higher Education, which compiles the rankings, said that margins were extremely tight at the top, with all the top-ranked institutions excelling against measures in teaching, research, citations, international outlook and income.

The sterling performance of Oxbridge and other British universities comes as a fillip to the sector after a summer of headlines criticising vice-chancellors’ pay and rising graduate debt, with the government threatening to overhaul funding.

A key factor in the rankings is income, with both Oxford and Cambridge up 24% and 11% respectively while their nearest rivals, the California Institute of Technology and Stanford University saw falls in income.

However, the rankings director, Phil Baty, has warned that the UK’s success could be short-lived, as Brexit threatens to take a toll on the research income enjoyed by its leading higher education institutions, putting their future as world-leaders in jeopardy.

Mr Baty said: "The UK higher education system is facing intense political pressure, with questions over the value for money provided by £9,250 tuition fees in England, our continued attractiveness to international students, the flow of research funding and academic talent post-Brexit, and even levels of vice-chancellors' pay.

"But one thing this new data makes absolutely clear is that the UK has many of the very best universities in the world and it has one of the world's strongest higher education systems.

"The data shows UK universities are consistently producing ground-breaking new research which is driving innovation, they are attracting international students and academic talent and are providing a world-class teaching environment.

"They are a huge national asset, and one that the country can ill afford to undermine at a time when its place in the global order is under intense scrutiny."

This year’s top 10, with last year’s position in brackets, are:

1. (1) University of Oxford (U.K.)

2. (4) University of Cambridge (U.K.)

=3  (2) California Institute of Technology (U.S.)

=3  (3) Stanford University (U.S.)

5.   (5) Massachusetts Institute of Technology (U.S.)

6.   (6) Harvard University (U.S.)

7.   (7) Princeton University (U.S.)

8.   (8) Imperial College London (U.K)

9. (=10) University of Chicago (U.S.)

= 10 (9) ETH Zurich – Swiss Federal Institute of Technology Zurich (Switzerland)

= 10 (13) University of Pennsylvania (U.S.)

Source: Times Higher Education World University Rankings 2018