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Arsenal's defeat, their first in 12 league games, sees them remain second, two points behind City and level on points with third-placed Liverpool with six games left to play.
Pep Guardiola's men have 73 points with six games remaining in a rip-roaring three-way title race, two points ahead of both Arsenal and Liverpool, who can climb over City with victories in their respective games on Sunday.
Bundesliga leaders Bayer Leverkusen secured a last-gasp 2-0 home win over West Ham United.
With seven games remaining in the neck-and-neck title race, Liverpool and Arsenal have 71 points with the Gunners leading on goal difference. Holders Manchester City are third on 70 points, while United are sixth.
Arsenal's 10th win in their last 11 league games put them on 71 points from 31 games.
Juergen Klopp's side have 70 points from 30 games, two ahead of Arsenal and three more than champions Manchester City.
Mikel Arteta's side moved into first place with 68 points from 30 games although Liverpool, who have 67, can move back to the summit with a home game against Sheffield United.
Liverpool claimed a 2-1 comeback victory over Bright.n & Hove Albion.
Liverpool are second with 64 points, behind the Gunners on goal difference, with 10 games remaining of a thrilling three-way title race..
Erling Haaland, who missed a golden first-half chance, secured the points with a late strike.