Jurgen Klopp's side went top for a few hours on Saturday by beating Newcastle 1-0 at St James' Park, but City hit back in style in the late kick-off, easing past Leeds 4-0 to return to the summit of the table.
Reflecting on the two teams' performances, Neville was full of compliments, suggesting neither side has shown a chink in their armour yet.
Liverpool beat Newcastle on Saturday, and rarely looked troubled by their opponents
Manchester City responded by comfortably seeing off Leeds at Elland Road
'The thing that actually City have done tonight, which is massively impressive, but they make it look easy, is that when we were up against the team going for a title and they played before us, we always wanted to play first,' he told the Gary Neville Podcast, as quoted by Sky Sports.
'When Liverpool have gone and done what they did at lunchtime today at Newcastle, after Villarreal in midweek and all the games they've had recently, you're thinking that switches the pressure to City, but you never really get the impression that these two teams feel that pressure.
'That's because of their dominance, because of their class, because of their composure, because of their rhythm. Everything that they have. They just seem to be in control, they seem to be enjoying it.'
Neville feels the outlook of a title race has changed since his playing days as he pointed out that City and Liverpool appear to be going about their own business, rather than making it a personal battle.
Gary Neville thinks Man City and Liverpool are not feeling the pressure of the title race
'When we were going through these tussles with Arsenal, or Chelsea or Blackburn in the mid-90s, it always felt like a fight.
'But this doesn't feel like that, even when they played against each other in that brilliant 2-2 draw. Liverpool did very well to come back in and then there were hugs at the end and it's a very pleasant, respectful run-in.
'But you cannot deny the excellence of both of these clubs and both of these teams at this moment in time because it is a standard that we've not seen before in terms of consistency at the end of the season.
'You could say that in other seasons, teams have gone on these types of runs towards the end, but these teams are in the Champions League, they're in the FA Cups. they're in the Carabao Cups, they are playing tonnes of matches and still doing it,' he added.
Klopp opted to start Mo Salah, Trent Alexander-Arnold, Thiago Alcantara and Fabinho on the bench on Saturday, while Pep Guardiola left Kevin De Bruyne, Bernardo Silva and Riyad Mahrez out of his own starting line-up hours later.
Neville has hailed Jurgen Klopp for having the courage to rotate his squad in big games
Neville also hailed Pep Guardiola for showing faith in his squad rather than using the same XI
These decisions paid off, and Neville praised the duo for showing faith in their respective squads.
He continued: 'What Jurgen Klopp and Pep Guardiola are doing today is, they're basically empowering the squad.
'You hear managers say "I've got a great squad", but have you got the guts and the courage to really use that squad in big matches where you need to win?
'Where you know if you don't win there is a large consequence, or you're probably going to lose a league title, or you're going to get knocked out of a European Cup competition. So to do it and then come out of it and win - you've empowered everybody.
'You've made everybody feel part of it, and the strength in that squad and the commitment of everybody means that you start to blend into the feeling of every three days, you know everyone's had a game, no one feels like there's a first eleven.'
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