Arsenal Transfer News: Latest Rumours on Alexis Sanchez and Shkodran Mustafi

Alexis Sanchez reportedly wants a new contract paying £400,000 per week to stay at Arsenal beyond this transfer window. The Chilean forward, whose deal expires in 2018, has turned down an offer of £300,000 per week from the Gunners.

Instead, Sanchez is "demanding to soar clear as the Premier League's top earner if he is to commit to a new contract," according to David Woods of the Daily Star.

Woods also detailed how Sanchez has turned down Arsenal's latest proposal, news the journalist believes will encourage Manchester City to renew their attempts to sign the former Barcelona star: "Despite his contract having less than a year to run Manchester City are ready to increase their opening £50m offer by a further £10m."

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City manager Pep Guardiola signed Sanchez for Barca, and his club has the financial resources to meet the 28-year-old's lofty demands. He would also add Sanchez to a squad better equipped to win this season's Premier League title, as well as being able to offer UEFA Champions League football.

By contrast, the Gunners find themselves in the UEFA Europa League after finishing fifth last season despite Sanchez's 24 goals and 10 assists in England's top flight, per WhoScored.com.

With Sanchez out with injury, Arsenal have already lost once in the league this season, falling to a 1-0 defeat at Stoke City last time out. Meanwhile, City have four points on the board and a greater depth of talent in midfield and forward areas.

Significantly, Guardiola was recently unwilling to rule out trying to sign Sanchez during the remainder of this window, per Mike Whalley of the Daily Express: "You have to ask Alexis Sanchez. He's a player and the other clubs have to talk about it. Normally I don't talk about players from other clubs."

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Even so, Arsenal boss Arsene Wenger has remained steadfast in his conviction to keep Sanchez, even if it's just for one more season.

The Frenchman is convinced Sanchez will still play at a high level, even in a contract year, according to Mike Walters of the Daily Mirror: "I can only tell you what happens here—Alexis works hard and he is focused to play. What is good is that our mutual interest is that he does well for us. On top of that I deeply feel he loves to be here and he loves the club."

Wenger knows how much this Gunners squad needs Sanchez and the inspiration he provides in the final third. However, meeting wage demands sure to change the dynamic of the club may prove a bridge too far for the traditionally financially cautious Wenger.

If so, a big-money offer from City may be too tempting to ignore.

One Arsenal player seemingly inching closer to the exit door is centre-back Shkodran Mustafi. The defender has reportedly "agreed a deal in principle" to join Serie A side Inter Milan, per Sky Italia's Gianluca Di Marzio (h/t Football Italia).

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Football Italia detailed the move: "Arsenal would accept an initial loan move, but want to make it an obligation to buy, according to Sky."

Mustafi only joined the Gunners from Valencia last summer, but a sale is still possible one year on. The 25-year-old struggled with the pace and aggression of the Premier League despite showing some comfort on the ball and when playing out from the back.

Even so, Wenger is willing to sell Mustafi if he can recoup the £34 million the club spent on the defender in 2016, per John Cross of the Daily Mirror.

Selling Mustafi would mean further thinning the central-defensive ranks in Wenger's squad. The Frenchman has already sold Gabriel Paulista to Valencia for £10 million this summer.

Being prepared to sell Mustafi as well is something of a risk given Arsenal switched to a back three earlier this year. Wenger has been content to deploy full-backs in central roles, with Nacho Monreal and Sead Kolasinac playing in the middle this season to mixed success.

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Ditching Mustafi would leave Laurent Koscielny and Per Mertesacker, supported by the 21-year-old Rob Holding and the 22-year-old Calum Chambers, as the only senior centre-backs at Wenger's disposal. It would be a risk relying on such a small rotation, but Mustafi's struggle to make the grade at Arsenal could force Wenger's hand.

The manager has seemed keen to trim his squad this summer, but that process shouldn't involve moving on from Sanchez, the lone world-class player the Gunners can call on.