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After a last-gasp penalty against Leicester City helped Liverpool make it eight wins from eight games on Saturday, City were expected to respond but instead went down 2-0 with Adama Traore scoring a late double at a stunned Etihad Stadium on Sunday.
It meant City are eight points adrift of Liverpool already, which considering the relentless nature of last season' title race when the sides were virtually inseparable throughout a compelling run-in, feels like a chasm.
City's fans could at least comfort themselves as Manchester United slipped to a dismal 1-0 defeat by Newcastle United later on Sunday which left them in 12th spot, two points above the relegation zone.
Teenager Matthew Longstaff, playing in midfield alongside his older brother Sean, scored Newcastle's winning goal on his Premier League debut to help his side out of the bottom three.
Arsenal moved into third place in the table with 15 points to City's 16 thanks to Davis Luiz's first goal for the club early on in a tight 1-0 win at home to Bournemouth.
Chelsea romped to a 4-1 victory at Southampton to climb into fifth place with 14 points - Tammy Abraham paving the way for the win with his eighth league goal of the season.
City's first home league defeat since they lost to Crystal Palace on December 22 left Liverpool with the biggest lead after eight games but manager Pep Guardiola was not panicking.
"I know these guys," Guardiola said. "They are still incredibly involved and they can still do it.
"The distance is big, I know that. For many circumstances, they (Liverpool) didn't drop points. It is better not to think one team is eight points ahead. It is only October."
That they were undone by a 19-year-old on his first Premier League start added to the sense of gloom over United who looked bereft of ideas as an attacking unit.
They have won only two of their last 13 Premier League games and Solskjaer's golden honeymoon period when he replaced Jose Mourinho, first as a caretaker, is now a fading memory.
"We are never happy when we don't win and we are going through a very difficult period," Solskjaer said.
For Newcastle manager Steve Bruce it was his first victory over United as a manager at the 23rd attempt.
His decision to throw in Longstaff was fully vindicated as he thumped home a second-half winner.
"Since pre-season in China I've said 'who's this kid?' He stands out with his ginger hair," Bruce said. "He has wonderful enthusiasm and he lights up your day.
"He's 19? So what. I'm delighted for him."