I think that you should look at the whole picture. The quality of the programme, the facilities (curricular and otherwise), the graduate prospects and the support network.
In my opinion, I think that it would be better to attend a university that is higher ranked both at home and abroad. This is because when you graduate, you would compete for jobs with many people from the UK and around Europe.
Do not get bugged down by the fact that the particular department is not number one in the country. Focus on the particular strengths and tailor these strengths to your preferences.
Oxford is not known for its engineering; but if you graduate from Oxford, I do not think that it would be difficult to get jobs at the end.
Finally, I think that you need to critically analyse your future plans. University may be for 3, 4 or 5 years; but it, sometimes, plays a key role in the short term or even the long term.
Good luck!