Manchester City boss Manuel Pellegrini admits that his team did not perform against an inspired Arsenal side.
The Citizens enjoyed plenty of possession against the Gunners but lacked ideas in the final third and went behind after Vincent Kompany brought down Nacho Monreal in the penalty area.
City started the second half brightly but again failed to show creativity in the offensive department and were punished in the 67th minute when Olivier Giroud added a second for Wenger's side.
The defeat sees Jose Mourinho's Chelsea open a five-point lead at the top of the Premier League with the Blues to host Pellegrini's men on January 31.
"We didn't play a very good game," Pellegrini said.
"We ran a lot, we had a lot of possession, but we didn't have creative ideas to try to find the space against a team that defended very well. We conceded two goals from set pieces.
"There are two principal reasons [why we lost]: one was the penalty, which changed the game. I don't think it was a penalty, but it was unnecessary [for Vincent Kompany] to do it.
"In that moment the game changed - we were nervous after the goal - but I don't want to have the excuse of the penalty.
"And we were not creative - we didn't have the ideas to cause damage in their defence. Without creativity it is difficult to score goals.
"[But] we must be clear that we did not play well. We had a lot of possession but after that we did not have the ideas to be a creative team against Arsenal, who defended very well.
"We improved in the second half, especially in the first 15 minutes, but another goal in set pieces came in our best moment. [Before then] I do not remember one chance from Arsenal."
Earlier this week the Chilean said that Manchester City can cope without Yaya Toure and believes the 31-year-old's absence was not the reason why they lost against the Gunners.
"Yaya Toure is a very important player for us, but we played without Sergio Aguero and now we must play without Yaya," he said.
"This team cannot depend on just one player. That is not the reason why we lost.
"It is important to play against Chelsea and close the gap to two points, but even if we don't win and it is five points, there is still 45 points to play for, so we have a lot of time to recover the lead Chelsea have.
"The most important thing is to improve the way we are playing, because the last five goals we have conceded were from set pieces."
