City blew their big chance to be number one at Christmas thanks to a mixture of sloppy defending and bad luck.
Two Everton goals in the first 20 minutes were enough to end an eight-match unbeaten run on a bitterly cold night.
Strikes from Tim Cahill and Leighton Baines gave the visitors a fourth successive win at the City of Manchester Stadium as the Toffees’ hoodoo continued.
Though City improved and dominated after the break, all they had to show for their efforts was a Phil Jagielka own goal on a frustrating night for Roberto Mancini’s side who also had Kolo Toure sent off in the dying seconds.
With City’s game one of only three Premier League matches to survive the Big Freeze this weekend, the Blues were desperate to collect the three points that would guarantee top spot at Christmas for the first time since 1929.
With the news that skipper Carlos Tevez had withdrawn his transfer request, there was a positive buzz around the stadium prior to kick off.
Nigel de Jong was suspended for picking up his fifth booking of the season at West Ham so James Milner returned to the starting line-up while Aleksandar Kolarov also resumed first team duties after his one-match ban.
Everton, languishing near the foot of the table and without a win in seven games, were chasing only their second away win of the season in order to quicken their climb up the table – and within four minutes they were ahead.
A hopeful cross by Leighton Baines was headed on by Kolo Toure but the ball was picked up by Seamus Coleman and his cross presented with Tim Cahill with a simple header that he planted past Joe Hart from close range – the Australian’s fourth in seven games at the CoMS all at the same end.
It was a sloppy goal to concede by the Blues who were being out-muscled in midfield almost from the word go. Whatever David Moyes tells his players before they play City he should perhaps try every game because quarter of an hour later, they doubled their lead with Baines ending a neat four-man move by curling a shot past Hart from eight yards.
The goal came while Pablo Zabaleta had been off receiving treatment for a head injury and Roberto Mancini looked none-too-impressed by the time it had taken to get the Argentine back on the pitch and ready for action again
With just eight home goals all season, it was going to take a mammoth effort by the Blues to get back in the game. City had a couple of chances before the break with David Silva and Mario Balotelli going close, but the longer the game went on without a home goal, the more it seemed it was going to be one of those nights.
Adam Johnson replaced James Milner at the break, but with the visitors often putting ten men behind the ball, it was going to take something special to get City back into the game.
Victor Anichebe’s two soft bookings in the space of five minutes reduced Everton to ten men, but the pattern of the game remained unaltered with the Blues unable to penetrate the Toffees’ dogged back four.
It was going to take a deflection or something bizarre to get City back in the match – and on 72 minutes, that’s exactly what happened. Silva found Yaya Toure in space inside the box and the Ivorian’s cross was turned past Tim Howard by Phil Jagielka.
It was a lifeline, no more, no less. Balotelli broke through with just the keeper to beat minutes later but saw his shot hit the post but Tevez couldn’t convert the rebound as the Blues pressed for an equaliser that ultimately just wouldn’t come and an injury time red card for Kolo Toure merely compounded a miserable night all round.
Howard ended the night the hero saving from Tevez and Kolarov and the Blues were left ruing the fact that they couldn't manage more than one goal from 25 attempts.