Watford beat Liverpool 3-0 on Saturday to inflict a first Premier League defeat of the season on Jurgen Klopp's side.
The Reds went into the game chasing a record-breaking 19th consecutive league win but were deservedly beaten by the struggling Hornets at Vicarage Road.
Elsewhere, Marcos Alonso hit a double for Chelsea as they were forced to come from behind to secure a 2-2 draw with Bournemouth at the Vitality Stadium.
Saturday also saw wins for Crystal Palace and West Ham United, while Newcastle United were held to a goalless draw by Burnley.
Brighton & Hove Albion 0-1 Crystal Palace
Bournemouth 2-2 Chelsea
Newcastle 0-0 Burnley
West Ham 3-1 Southampton
Watford 3-0 Liverpool
Jamie Vardy, Leicester City: 17
Pierre-Emerick Aubameyang, Arsenal: 17
Sergio Aguero, Manchester City: 16
Mohamed Salah, Liverpool: 15
Danny Ings, Southampton: 15
Marcus Rashford, Manchester United: 14
Tammy Abraham, Chelsea: 13
Sadio Mane, Liverpool: 13
Standings (Played, Won, Goal Difference and Points)
1. Liverpool: 28, 26, +44, 79
2. Manchester City: 27, 18, +39, 57
3. Leicester City: 28, 15, +26, 50
4. Chelsea: 28, 13, +8, 45
5. Manchester United: 27, 11, +12, 41
6. Tottenham Hotspur: 27, 11, +8, 40
7. Sheffield United: 27, 10, +4, 40
8. Wolverhampton Wanderers: 27, 9, +6, 39
9. Burnley: 28, 11, -6, 38
10. Arsenal: 27, 8, +3, 37
11. Everton: 27, 10, -5, 36
12. Crystal Palace: 28, 9, -7, 36
13. Southampton: 28, 10, -16, 34
14. Newcastle United: 28, 8, -17, 32
15. Brighton & Hove Albion: 28, 6, -8, 28
16. West Ham United: 28, 7, -14, 27
17. Watford: 28, 6, -16, 27
18. Bournemouth: 28, 7, -17, 27
19. Aston Villa: 27, 7, -18, 25
20. Norwich City: 28, 5, -26, 21
Watford gave their survival hopes a big boost by pulling off a shock win over the league leaders on Saturday.
The Hornets had the better of the opportunities in a goalless first half. Gerard Deulofeu curled an early effort over the crossbar and laid on a chance for Abdoulaye Doucoure that was blocked by Virgil van Dijk.
However, the Watford winger was forced off just after the half-hour mark with a knee injury after a clash with Van Dijk:
The Hornets wasted another chance just before half-time after Alisson had spilled the ball. Troy Deeney saw his attempted chip blocked by the Liverpool goalkeeper and then drifted the follow-up wide of the target.
Watford continued to attack and opened the scoring on 54 minutes. A long throw into the box fell to Doucoure to cross for Ismaila Sarr to tap home at the near post:
Sarr added a second on the hour after being sent through on goal by Deeney. The winger raced clear of Van Dijk and Dejan Lovren and chipped a good finish over Alisson:
Deeney sealed a famous win for Watford after Trent Alexander-Arnold's attempted pass to Alisson was intercepted by Sarr. The winger then picked out his to sidefoot home from the edge of the penalty area.
Chelsea dropped points for the fourth consecutive Premier League away match on Saturday after being held to a 2-2 draw by Bournemouth in an entertaining match on the south coast.
The Cherries started the game well and had early chances to open the scoring. Philip Billing was denied by goalkeeper Willy Caballero and fired an effort just wide in the opening five minutes.
The visitors suffered a blow when Jorginho picked up his 10th Premier League booking of the season for a foul on Billing, which will earn the midfielder a two-match ban:
Alonso opened the scoring on 33 minutes after Olivier Giroud's header had hit the woodwork to give the Blues the advantage against Eddie Howe's side.
However, the Cherries hit back in the second half with two goals in three minutes. The equaliser came when Jefferson Lerma rose above Mateo Kovacic to head home Ryan Fraser's corner, and Josh King was then on hand to tap home Jack Stacey's low cross at the far post to give Bournemouth the lead:
Frank Lampard sent on Michy Batshuayi in place of Giroud, and the Belgian had the ball in the back of the net within minutes of his arrival. However, his effort was rightly ruled out for offside.
It was left to Alonso to secure a point for Lampard's men with his second of the day. The wing-back headed the equaliser after Aaron Ramsdale had parried a shot from Pedro:
The draw means Chelsea move four points clear of Manchester United in fourth place. The Red Devils can close the gap on Sunday when they take on Everton at Goodison Park.