Tottenham leapfrog City into second after thrashing Bournemouth 5-0, while Manchester United's flawless start under caretaker manager Ole Gunnar Solskjaer continued with Paul Pogba scoring twice in a 3-1 win over Huddersfield.
They'd come to the King Power Stadium knowing fully well if that if they drop points again, then Liverpool's lead at the top of the table could potentially extend to seven points. We lose a game, it happens.
Meanwhile, Tottenham continue to fly under the radar, despite beating Bournemouth 5-0 at home, and they will continue to mount a challenge alongside Liverpool and City.
Fernandinho's absence has been a huge problem for Pep Guardiola's side Credit PA
"That's the Paul I know", said Solskjaer.
Just a few weeks ago City seemed unstoppable as they started their title defence with a 15-game unbeaten run.
A sluggish start at Old Trafford was enlivened by Nemanja Matic's tap-in after Victor Lindelhof's header header had been cleared off the line in the 28th minute. We had more chances than them.
"I've not got used to it yet. We changed the system to get a better balance in the team and it is a fantastic result for this team".
The City boss ignored questions about next week's six-pointer against Liverpool, insisting they first had to beat Southampton at the weekend.
"When you play football for Man United you should be happy".
Sidwell thinks the loss of Fernandinho, who has missed the last two games, is one contributing factor.
Guardiola admitted Liverpool and Tottenham are better than his City team at the moment - and he is desperate for a win as soon as possible.
It has been a miserable festive period so far for Guardiola's side, who have now twice surprisingly been beaten after scoring the game's opening goal. The influential Xherdan Shaqiri and Fabinho added the other goals in a comfortable win, the 16th of the season with three draws at its halfway point.