The Manchester clubs have already shown they are the best equipped to win the Premier League title this season but their biggest tests are still to come, former England striker Alan Shearer told Reuters.
City top the standings on 19 points after seven games with United just behind them on goal difference, the free-scoring pair five points clear of Tottenham Hotspur in third place after flying starts to the campaign.
"It will be one of the Manchester clubs that will win," Shearer, the Premier League's record scorer with 260 goals, said in an interview.
"They have both got two top managers in Pep Guardiola and Jose Mourinho, who are used to winning trophies. City didn't hire Guardiola to win the League Cup. They hired him to win the Premier League and the Champions League.
"United did the same and won two trophies already under Mourinho last season. They will be looking to win bigger things this year."
Shearer is in India to interact with the attendees of a Premier League fan park event being held in Bengaluru, where roughly 40,000 spectators will watch the top matches of the weekend on a giant screen.
Six wins from their opening seven games, with 21 goals scored and only two conceded, have raised expectations at Old Trafford, but the coming weeks should give a stronger indication of just how ready United are for a serious push for the title.
Mourinho's side have yet to face any of the five teams that finished above them last season but that will change when they visit Liverpool at Anfield on Saturday.
Spurs visit Old Trafford on Oct. 28 and United travel to StamfordBridge a week later to take on champions Chelsea, the Portuguese manager's former club.
"Before the start of the season I felt Manchester United will be a lot better this year and they were my tip for the title," Shearer said.
"They won two trophies last year, they have improved the team significantly. United have their biggest test this weekend with their trip to Anfield playing against Liverpool, who have had a stop-start season up to now.
"Liverpool haven't really improved that much defensively. But it won't surprise me if they put in a big performance against United tomorrow (Saturday)."
Guardiola's City will host StokeCity, also on Saturday, hoping to maintain their position at the top of the table.
"City look strong after the first seven games and they have signed a new goalkeeper, which has given them a bit more toughness at the back," Shearer said, referring to the club's acquisition of Brazilian Ederson from Benfica.
"From that point of view they have definitely improved. So that's why I said both teams will be fighting for the Premier League this season."
Shearer feels the Premier League has come on in leaps and bounds since its launch in 1992 and the sheer competitiveness sets it apart from other major leagues across Europe.
"It might not be the best standard but it stands out when you put everything together, whether that be the stadiums, the atmosphere, how competitive it is," said the 47-year-old, who played for Newcastle United, Blackburn Rovers and Southampton.
"The one thing that makes it different is everyone can beat each other. Whether it's Burnley going to Anfield or Burnley going to Wembley or Tottenham at Chelsea... that is typical of our league. As a whole package I believe it's the best."