Kepa's howler gifted City the opener. Nico O'Reilly headed twice in four minutes.
Manchester City are Carabao Cup champions for the ninth time after a controlled 2-0 victory over Arsenal at Wembley.
The match turned on a single moment of catastrophic goalkeeping. In the 59th minute, with the scores level at 0-0, Rayan Cherki floated a seemingly routine ball into the Arsenal area. Kepa Arrizabalaga — chosen ahead of David Raya as Arsenal's cup goalkeeper — inexplicably fumbled it, allowing Nico O'Reilly to nod into an empty net.
The choice to play Kepa over Raya will be questioned heavily. Raya, Arsenal's first-choice keeper, has made 28 Premier League appearances this season and has been one of the division's better goalkeepers. Arteta's traditional rotation policy for cup competitions cost him dearly.
If Kepa was the villain, Nico O'Reilly was emphatically the hero. The 21-year-old, celebrating his birthday weekend, delivered the performance of his young career. His second goal — arriving at the far post to meet a clipped Matheus Nunes cross — was the composed finish of a player who had grown into the game.
Both goals were headers. Both came in a four-minute spell. It was the kind of performance that defines young careers.
Arsenal's first half was genuinely excellent. They pressed high, created clear chances through Saka and Havertz, and looked the likelier scorers. James Trafford's triple save in the 34th minute — perhaps the save of the season — denied them the lead they deserved.
City's adjustment at half-time was tactically significant. Guardiola shifted to a more direct approach, using Doku's pace in wide areas to stretch Arsenal's defensive line. Within 15 minutes of the restart, that pressure had converted into two goals.
With this victory, Pep Guardiola now stands alone as the most decorated manager in League Cup history with five wins — surpassing Brian Clough, Alex Ferguson and Jose Mourinho. It is his 19th trophy as Manchester City manager.
For Arsenal, the Premier League title remains the priority. They lead by nine points with a game in hand and remain favourites for the top flight. But the "nearly men" narrative grows louder. Arteta has now lost five major finals.
For City, this is confirmation that — despite a difficult Premier League season — they remain capable of winning silverware when it matters.