Ole Gunnar Solskjaer says he is happy with his squad but concedes Manchester United are not yet "close enough to challenge for the Premier League trophy".
United were in fine form prior to the suspension of football due to the coronavirus pandemic, going 11 matches unbeaten in all competitions.
They drew 1-1 at Tottenham in their first match after the resumption and welcomed Marcus Rashford and Paul Pogba back into the first-team picture.
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Solskjaer admits the duo's return boosts the quality at his disposal but indicated he still plans to be active in the forthcoming transfer window in order to try and turn United into genuine title challengers next season.
"We've developed over the season and I think now we had a spell of 11 unbeaten," Solskjaer said ahead of Wednesday's visit of Sheffield United, live on Sky Sports.
"But then you add Paul Pogba and Marcus Rashford to that and you're thinking 'yeah, we're not too far away and I'm very happy with the squad.
"If there are any good deals to be made and players who can make us better, of course we might have to spend some money on that. But the squad is great to work with and it's moving in the right direction.
"We're still not where we want to be, close enough to challenge for the Premier League trophy but we take one step at a time.
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"Obviously City and Liverpool the last couple of seasons have put the standard where it should be to win the league.
"Hopefully now we can challenge for the Europa League, FA Cup this season, top four and then let's see how much we can invest for next season."
Scott McTominay has signed a new contract which will keep him at Manchester United until June 2025, with the option to extend for a further year.
The 23-year-old midfielder made his debut in 2017 against Arsenal and has gone onto make 75 appearances for the first team, scoring six goals.
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After signing his new deal, Scotland international McTominay said: "Whilst I understand that we all have so many other things to think about at the moment, I'm so happy to sign this contract and play a part in the future ahead for this team.
"All I have ever known is United and I hope that my passion for the club shows every time I go onto the pitch. I'll continue to give everything for this club whenever I pull on the shirt. I want to thank the manager for the faith he has shown in me and everyone at the club that has helped me to get where I am today."
Under-fire Manchester United goalkeeper David de Gea is still the best in the world, according to Ole Gunnar Solskjaer.
De Gea came in for some fierce criticism from Roy Keane for his performance in the 1-1 draw at Tottenham on Friday, with the former United captain saying he was "sick to death" of the "overrated goalkeeper".
Gary Neville has spoken of how De Gea's form is "more than a blip", as momentum grows for Dean Henderson - who is on loan at Sheffield United but cannot play against his parent club on Wednesday night - to become the new No 1 at Old Trafford.
Solksjaer, however, has no doubts De Gea will recapture his form and does not feel any other goalkeeper in the world is on his level.
"David is the best goalkeeper in the world," his manager said.
"He's conceded two goals in the last seven games he's played for us. There are two games against City, Chelsea, of course Tottenham, Everton. Two goals in seven games, we've gone on a run not conceding goals.
"The Everton one is a freak one, maybe. This one, he cannot save it.
"He makes great saves, he wins games for us and I still think he's the best goalkeeper in the world."
Dean Henderson is ready to eventually become Manchester United's first-choice goalkeeper, according to his Sheffield United team-mate Oliver Norwood.
Henderson, 23, is currently on loan at Bramall Lane from United, with Blades manager Chris Wilder confident the club can extend his stay until the end of the season.
But talk of him succeeding David de Gea as United's No 1 has gained momentum following a drop in form for the Spaniard, highlighted recently by his performance in the 1-1 draw against Tottenham, which earned criticism from Gary Neville and Roy Keane.
Norwood, himself a United academy graduate, says Henderson has what it takes to eventually make the step up.
"Definitely, he's proven himself this season, he's up there with most clean sheets in the league so he's obviously doing something right," Norwood told Sky Sports.
"I've read a few things from different people and I do agree that there would be a lot more pressure on him going and playing as Manchester United's No 1 rather than Sheffield United's - the scrutiny he would be under being England's No 1 as well.
"I'm sure Hendo can handle that. He's sure of himself, he's very confident."