The Citizens completed a domestic treble last season, but trail league leaders Liverpool by 14 points after losing 2-1 to neighbours Manchester United at the Etihad Stadium on Saturday.
City have lost four times this season – as many as they lost the whole of last campaign – and after one victory in their last four league games, the Spaniard has pondered whether his side can keep pace with the European giants.
“United have the quality to defend and the quality to attack on the counter-attack and you have to accept that,” Guardiola said.
“That is the level we face, against Liverpool, United, Barcelona, Madrid, Juventus – they are the teams we have to face and the reality is maybe we are not able now to compete with them.
“We have to improve and accept it and move forward. Maybe we need to live that as a club to improve, to accept the reality now and improve.”
11 BUSINESS NUGGETS FROM SUPER EAGLES BRONZE MEDAL TRIUMPH. The content of this ebook will propel you above your competition. DOWNLOAD NOW!!!