Liverpool are currently two points clear at the top of the Premier League table but City still have a game in hand.
Next up for Jurgen Klopps side in the Premier League is their clash against Chelsea at Anfield on Sunday and Neville believes the league leaders will drop points in that match.
I know the difficulties Liverpool have had [against Chelsea, Neville told Sky Sports.
I think the type of player Chelsea have got in Hudson-Odoi, Willian, Pedro, Barkley – they can all beat men from midfield. So I do think they are the type who will cause Liverpool problems on Sunday.
But Carragher believes Chelseas congested fixture schedule in which they play three games in seven days will put Maurizio Sarris side at a huge disadvantage.
The reason I think Liverpool will win it is because theyve got a big advantage, said Carragher.
Liverpool will have played Friday, Tuesday, Sunday. Chelsea play Monday, then Thursday, and away game in Europe, then get to Anfield on Sunday.
I think Liverpool will win for that reason alone.
But both Carragher and Neville can see Liverpool slipping up against Rafa Benitezs Newcastle when they travel to St James Park.
I think Liverpool will get to the Champions League semi-finals, I think Rafa Benitez as a manager, the way he sets up, he will make it difficult for Liverpool, said Carragher.
People may say hes an ex-Liverpool manager, hed like to see Liverpool win the league but Im not sure really.
I think hed have won the league himself he might say okay, Jurgen can win one. I think he might be thinking I dont want JUrgen to do something I havent done!
But I dont think there will be any favours given in that. The way Rafa sets up tactically, he will make it difficult, play five at the back, he will make it a difficult game.