If James McAtee is good enough for top half Premier league team,then he is good enough to be part of City team.
For me Palmer should not leave unless we get new winger.
If Palmer leaves someone should replace him from academy but him going to Brighton for me is not good loan unless they will guaranteed him playing time, they have a lot of players who plays in attacking positions and why would they develop City player when they can they own.
We already have small squad, and for next season it shouldn't be smaller,with academy players who are good to be part of team we can get depth in squad.