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Oxford University is the UK's highest ranked institution in this year's Times indexGetty

The UK continues to be a centre of excellence for tertiary education, boasting 34 of the world's top 200 universities. Three British institutions – Oxford, Cambridge and Imperial – made the top 10 in second, fourth and eighth place respectively.

Out of 800 universities featured in this year's Times Higher Education World University Rankings, the US leads the pack with 147 establishments, followed by the UK with 78. The University of Edinburgh is Scotland's highest-ranked institution (24) in the top 200, followed by Glasgow (76), St Andrews (86) and Dundee (185), while Cardiff also claimed a spot (182) and Queen's University Belfast debuted in 200th place.

In total, the top 200 rankings host 105 European universities, compared to 87 last year. Germany contributes 20 academies, followed by the Netherlands (12), Switzerland (7), France (5), Spain (3) and Italy (3). The UK's continental counterparts are fast narrowing the gulf found in previous years. Despite leading the pack for elite institutions, the dominance of the US has somewhat faded this year, with six of the top 10 and 39 of the top 100 universities. That's down by one and six respectively.

The California Institute of Technology (Caltech) is the elite educational establishment, having taken top spot for the fifth consecutive year. Universities are judged on measures such as teaching, research and international outlook and the west coast academy is highly regarded for its science and engineering research.

The mayor of London, Boris Johnson, said he was "incredibly proud" that four of the capital's universities featured in the top 30: Imperial, University College London, London School of Economics and King's. "The capital continues to be the global leader in education, innovating and inspiring top talent from both across the country and overseas," Johnson said.

Despite the optimism, there is cause for concern, according to Phil Baty, editor of the Times Higher Education World University Rankings. He hailed Britain as "a stand-out performer in this year's rankings", but warned: "Despite the UK's success, its continued cuts in higher education funding – the Higher Education Funding Council for England received a £150m budget slash this year – and series of immigration measures affecting overseas students will hinder its performance in the long run.

"Many of the country's European rivals, such as Germany, Switzerland and the Netherlands, are also performing well, but are less hindered by funding cuts and more welcoming for international students.

"The UK will have to work hard to ensure its higher education spending and immigration policies do not hinder its place in the world university rankings."

His caution was echoed by Nicola Dandridge, chief executive of Universities UK, who said: "If we want to maintain this leading position, we must start matching our competitors' increased investment in higher education."