Mikel Arteta believes his Arsenal team will be facing the best side in Europe when they take on Premier League leaders Manchester City at the Emirates Stadium on Sunday.
City have won a club-record 17 successive games across all competitions and are 10 points ahead of second-placed Manchester United.
Arteta knows Guardiola well after working under the City boss in Manchester for three years before returning to manage Arsenal, having previously played for the Gunners.
"I think they are the best team in Europe at the moment," Arteta said of City. "The way they are performing, the football they are playing and the consistency of the results, take all that and it makes them the best team.
"So we have a big but, as well, a very exciting challenge ahead of us on Sunday."
City made an uncertain start to the season but are now hot favourites to win a third Premier League title in four years
Arteta said he was impressed by how they had regained their form.
"What they have done is react to a difficult moment," he said. "They reacted in a really convincing way, all united and doing what they do best -- being very consistent and winning games very comfortably.
"They have weaknesses like every team but at the moment teams have struggled a lot to find any of that because I think first of all defensively they have been really, really strong."
Arteta's praise for City was reciprocated by Guardiola, who predicted Arsenal would be title contenders in the near future.
After City won 4-1 at the Emirates Stadium in the League Cup in December, the post-match inquest focused on whether Arteta would be sacked.
Guardiola was one of the few to speak out in support of the Spaniard, with Arsenal languishing close to the relegation zone.
But Arsenal kept faith with Arteta and he has steered them into calmer waters thanks to the rapid development of promising youngsters Bukayo Saka and Emile Smith Rowe.
"What the two months shows is that all managers need time," Guardiola said.
"He (Arteta) is not an exception, but when I see the last two months every game Arsenal plays they are better than the opponent.
"They have quality and incredible energy in (Emile) Smith Rowe, (Bukayo) Saka, (Pierre-Emerick) Aubameyang with the runs in behind, and they have the players with the quality in the middle to make the process quite well.
"Early in the future they will be a real contender to fight for the title."
Guardiola played down his influence on his former colleague, saying: "I didn't inspire him. What he knows he knows for himself.
"I'm not in this case absolutely any influence. What he is doing, the credit is for him and his staff."