IT was disappointing to lose at home to Liverpool last weekend but it's important to look at the big picture.

And, as far as I'm concerned, we're moving in the right direction.

On the evidence of the first 45 minutes last Sunday, you would have struggled to tell which of the two sides are favourites for a top-four finish.

We were 2-0 up at half-time and, had we scored another after the break, it would have been game over.

Fernando Torres' first goal had a touch of fortune and then we had Pablo Zabaleta sent off - a decision I have no argument with.

Dirk Kuyt's late winner also had a bit of luck as the ball fell kindly to him practically on the goal line.

I've heard one or two fans call the radio phone-ins to complain about the fact that we lost a two-goal lead.

But the fact is that we are only four points worse off than we were at this stage last season and we've scored 10 more league goals.

The big test for Mark Hughes will be the next two transfer windows.

And the time to judge his progress will be 12 months from now.

Of course, one of Mark's early moves was to bring back Shaun Wright-Phillips from Chelsea and I believe he fully deserves his place in the England squad.

I may be looking through sky blue-tinted spectacles but Wright-Phillips looks at home now he's back at Eastlands.

He looks a better, more confident player than he was the first time around at City.

And we'll need him to be when we tackle the UEFA Cup group stages next month.

Schalke 04, Paris Saint Germain and Racing Santander will all give us a run for our money.

But with three to qualify from a five-team group that also includes FC Twente, I am looking for us to go through.

GARY Owen is at gtcmanagement.co.uk for business energy savings.