Sanchez and German midfielder Mesut Ozil are both out of contract at the end of the season.

And the Gunners are residing to losing them for free at the end of the season, unless they can cash in early for a bargain price next month.

The pair have so far refused to sign an extension at the Emirates Stadium and Sherwood believes Sanchez has already given up playing for the club.

He thinks the Chilean has nothing left to play for in north London and should be let go next month.

"Arsene Wenger is no fool,” Sherwood told Sy Sports’ The Debate show.

"He looks after the purse strings at Arsenal.

"He'll take a view whether it's cynical on the behalf of Ozil.

"But Sanchez looks as though he's gone the other way.

"He looks like he might be making a decision to chuck the towel in.

"He's saying 'Why would you want to keep me, you might as well let me go somewhere else because I don't want to be at this football club anymore'."

However, Sherwood thinks the two players do make Arsenal better - if they can perform anywhere near their best.

“But Arsenal are better with those two players in their squad,” Sherwood added.

"But only if they're going to give what they can produce, and that is a world-class performance.

"Are Arsenal fans seeing the world-class performances at the minute?

"You'd have to say no."