Kevin De Bruyne scored the game’s first goal in the 24th minute, capitalising on a mistake by Takehiro Tomiyasu to fire the ball into an empty net.
In the 42nd minute, Arsenal equalised from the penalty spot, with Bukayo Saka sending Ederson the wrong way after the goalkeeper fouled Eddie Nketiah in the box.
In the 57th minute, Pep Guardiola’s side thought they had been awarded a penalty of their own, but VAR ruled that Erling Haaland was offside prior to being fouled by Gabriel Magalhaes.
Arsenal fall out of first place for the first time since August, now having failed to win three straight league matches.