Trent Alexander-Arnold’s late equaliser cancelled out Erling Haaland’s first half opener in a 1-1 draw at the Etihad Stadium.
City had twice as many shots as the visitors with 16 in total as well as 60% possession, but missed out on a record-equalling 24th successive home win.
WATCH: City 1-1 Liverpool: Brief highlights
“The frustration for Manchester City will be greater than the joy for Liverpool,” James said on Matchday Live’s post-match analysis.
“There were times in that game when City were in total control.
“The frustration will be that they didn’t take the opportunities. Alisson made a big save before the goal but it wasn’t like he was being overtested.
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“I know people will be shouting about the disallowed goal but in the end it was the right decision from the referee.
“I think Liverpool will feel they’ve got away with a point as opposed to thinking we deserved a point because we played so well.”
With Arsenal winning later on Saturday, City have been knocked off the top of the Premier League table.
But Michael Brown, who provided co-commentary for Matchday Live, says City’s performance only reiterates his belief that we remain favourites for a record fourth title but that Liverpool and the Gunners will offer a stern challenge.
“City deserved to win, Liverpool played their part for sure so there’s a title race on,” he said.
“But nothing changes from my outlook, City are still the favourites for the title and I still think they’ll go on and win the Premier League.
“A draw is not the worst thing to happen. But to watch that football and the way City go about it is amazing.
“Liverpool are a great side and we saw their counter-attacking ability but City are in a great position.”
Brown also believes that City would have gone on to win the game had Ruben Dias’s goal been allowed to stand.
Referee Chris Kavanagh ruled out the goal for a foul by Manuel Akanji on Alisson who spilled a catch from Julian Alvarez’s corner.
Brown disagreed with the decision but former England keeper James, who was also the number one at Anfield during his career, says the officials got it right.
“Alisson puts his hands up to catch the ball, Akanji puts his hand on his arm, not his shoulder so that slightly impinges his movement,” he said.
“It wasn’t like he was in front of him to see it, he’s come from the side, puts his hand on him and that means he drops the ball.
“Because the referee gave it straight away, VAR has got to overturn the referee’s on-field decision. If the referee hadn’t seen his hand and given the goal, VAR would have still looked at it.
“It wasn’t a dangerous or overpowering foul, but the fact is, it was an interruption in Alisson’s movement. The decision is correct because it’s what the referee felt.”
