Liverpool legend John Barnes believes that Jurgen Klopp's side are 'clear second favourites' in the Premier League title race.
The Reds and Manchester City are the only two teams in the league yet to lose a game this season, although Pep Guardiola's side top the table by two points.
And, while Barnes is pleased with the progress his old side have made under manager Klopp, elevating them above much of the chasing pack, he feels that City are still favourites for the league title.
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"I am optimistic. I believe that Jurgen Klopp can maximise Liverpool's potential this season," he told Sky Sports.
"Unfortunately, Manchester City are a top team as well so if you are going to say that Liverpool are going to win the league then you are saying that Manchester City are not.
"They are still the favourites for the title, but we are running them much closer than we have done in the past and I do make us the clear second favourites. I am not saying that we cannot win it but that I think we are the closest to Manchester City."
The two sides drew 0-0 at Anfield when they met earlier this season, with Riyad Mahrez blazing a late penalty over the bar.
Barnes also addressed the upcoming Merseyside derby on Sunday, with the blue half of the city having not tasted victory at Anfield this century and not in their last 17 attempts at any ground.
However, Barnes feels Everton are a much-improved side these days under Marco Silva and will prove a sterner test than some fans might think.
"Everton have not been in form in recent years so we have gone into the game as clearly the better team," he added. "Much as we are a good team now, Everton are in better form than they were so I think it will be a much closer game."
Liverpool travel to France first as they take on Paris Saint-Germain in Champions League action on Wednesday night in a crunch encounter.