Mikel Arteta admitted that Arsenal must “keep believing” they can still win the ­Premier League for the first time since 2004 after a disastrous 2-0 defeat to Aston Villa handed Manchester City the initiative in the title race. Late strikes from the substitute Leon Bailey and a 19th league goal of the season for Ollie Watkins ­condemned Arsenal to only their fifth loss of the season. It meant that ­Arsenal missed the opportunity to return to the top of the table ­having seen rivals Liverpool also slip up against Crystal Palace on Sunday. But having lost out to City last ­season, Arteta, after setting the pace for most of the campaign, acknowledged that their fate is out of their hands once again. “That’s the reality right now. We knew that this moment could come and now it’s about reacting and keep ­believing,” he said. “We had one of the best perfor­mances in the first half that we have had this season by far against a really good team. It should have been three or four but it didn’t happen and momentum shifted in the second half and we conceded two very poor goals. Now is the moment to stand up as a leader and a character to make yourself count. Now it’s a big test for us.” Arsenal had conceded only four goals in their previous 11 Premier League matches but some slack defending allowed Bailey to score late on before Watkins compounded their misery with a smart finish. Having also gifted Bayern Munich two goals in the first leg of their Champions League quarter-final here on Tuesday, Arteta – who revealed that Martin Ødegaard had been unable to continue due to an unspecified knock – said his team must improve against the German ­champions to have a chance in Wednesday’s ­second leg. “The players are frustrated and sad,” he said. “But we have a ­beautiful opportunity that hasn’t happened for this club for 14 years to go to the semi-finals of the Champions League. It cannot come at a better moment.” Villa now find themselves three points clear of Tottenham in fourth spot having completed the double over Arsenal following their victory against them in December. “I’m very happy,” said Unai Emery, who insisted that beating his former employers had no more significance for him than any other win. “To come here is something important as a coach – it’s very difficult to beat Arsenal. For me it’s the same three points as we played for last week against Brentford.”