Carlo Ancelotti is embracing Everton’s “fantastic test” away to Manchester City on New Year’s Day as the Italian insisted his Blues side have the spirit and confidence to take on the defending Premier League champions.

Everton go into the clash on a five-match unbeaten run in the league, having notched victories in Ancelotti’s first two games in charge against Burnley and Newcastle.

Ancelotti believes the trip to the Etihad presents a chance “to see where we are” and called on his players to focus on their gameplan against Pep Guardiola’s City.

"It will a fantastic test for us against City, to see where we are," said the Blues boss. "It’s a really strong team but we have confidence to do our best and play a fantastic game. The moment is good for us and it’s good to have this kind of test. We have to be happy to complete against the top teams.

"We need to have the confidence to compete and to be focussed on our football. We don’t have to look too much to the opponents’ team because they are really strong. It’s better to be focussed on our football.

"The work Duncan [Ferguson] did [as caretaker manager] increased the spirit of the team and so I’ve found players with character and good attitude. I haven’t changed a lot since because we haven’t had time [with the Christmas fixtures].

"The players have shown confidence in the games and I hope this can continue in the next games which are really difficult.

"The players are focussed, concentrated. We’ve changed little bits defensively and offensively. The players have adapted really well and we have to look forward."

Ancelotti also confirmed he will have a meeting after the FA Cup third round tie at Liverpool on 5 January to "discuss if we can improve the squad" in the next transfer window as he reiterated his faith in a "really good squad" he has inherited as Everton manager.