The Citizens lost for the third time in four games to lose ground on Premier League leaders Liverpool FC throughout the month of December so far.
Chelsea FC became the first Premier League team to beat Manchester City this season after the Blues were 2-0 winners against the defending champions.
The Citizens signed off for Christmas with a surprise 3-2 defeat by Crystal Palace at The Etihad to lose for the first time in front of their home supporters this term.
Manchester City failed to make amends for that loss on Boxing Day after the Citizens squandered a lead to lose 2-1 at Leicester City.
Portugal international Bernardo Silva broke the deadlock in the first half but goals from Marc Albrighton and Ricardo Pereira turned the game on its head.
Manchester City were relegated to third place in the Premier League table and a point behind Tottenham Hotspur after Spurs were 5-0 winners against Bournemouth.
Liverpool FC had no problems dismissing Newcastle United to the tune of four goals to move six points clear of Spurs at the top of the table.
And Guardiola admitted Liverpool FC and Spurs are both in better form than Manchester City.
“Liverpool and Tottenham deserve it [to be ahead] – they win games and we don’t, the gap is increased,” Guardiola told BBC Sport.
“Last season we had a big gap, this season Liverpool and Tottenham are very good. We have finished the first half of the season, we have enough points to be champions but the other teams make more, they are better than us at the moment.
“Football is fascinating, unpredictable. People say what we did last season was easy – it was very difficult.”
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