Pep Guardiola concedes Liverpool is "extraordinary", but he is more focused on improving Manchester City than worrying about how it stacks up against the runaway Premier League leader.
City has won the title in the past two seasons under Guardiola yet now trails Liverpool, which have a game in hand, by 16 points.
Jurgen Klopp's side has dropped just two points in the top flight, but City manager Guardiola would prefer to focus on how the defending champion can raise its game.
"In terms of what we are as a team, we are open, we accept," he told a news conference before facing Sheffield United on Tuesday.
"We cannot deny it - the Liverpool team is extraordinary in terms of football, in terms of results.
"But every day I live almost 24 hours thinking about my team and what we are, what we are doing, what we can do better. I'm not too much distracted by other teams in other leagues or, in this case, Liverpool."
City has scored more league goals than any other team in the division this season, yet it has also conceded more than Sheffield United and last Saturday's opponent Crystal Palace, which claimed a 2-2 draw at the Etihad Stadium.
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"We concede few, but the opponents score goals from a few chances," Guardiola said. "That is difficult to solve. We have to improve in this area.
"We have scored I don't know how many more goals than Liverpool [12], so our way is good. I don't have the statistics here, but I don't think we concede more chances in one game. From the few, we concede goals that we shouldn't and drop points.
"You start from Tottenham in the first game, they shoot twice in the half on target and score two goals. Norwich shoot three times and score three goals.
"When this happens, it's difficult to fight against this Liverpool. We have to improve in this area."
Guardiola revealed John Stones and Benjamin Mendy had knocks following the weekend draw, although he was not yet sure if the issues would keep them out against the Blades.
The Spaniard felt criticism of Stones after the Palace game, in which he appeared to struggle against Wilfried Zaha, was harsh.
"It was unfair, yeah," he said. "We are there, I am there. Ups and downs in the career, the football manager always has to be strong. We know his quality."
-'I learn from watching Sheffield United'-
Pep Guardiola is not surprised by Sheffield United's success in the Premier League this season as the Manchester City manager revealed he learns from watching Chris Wilder's side.
It is seventh in the Premier League - just six points off a Champions League place - in its first campaign back in the top flight.
An expansive brand of football has brought Wilder many admirers, and Guardiola concedes he is among them.
City visits Sheffield United on Tuesday, having been made to work for a 2-0 home win last month.
"I'm incredibly impressed," Guardiola told a pre-match news conference. "When people say you can improve watching other games, other teams, other managers, this is the one.
"I never saw some movements they are doing. That's the reason why they are in the position they are.
"We saw it here [at the Etihad Stadium], we suffered here a few weeks ago. I'm really impressed. I admire them, honestly. I admire how they play and what they are doing.
"It's the same manager and a high percentage of the same players from League One, the Championship, now the Premier League, being near the top of the league up there.
"I like it. As a manager, you see some teams so you can improve - this is the one."
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