WALTER SMITH would have spent his entire weekend reflecting on his side's Old Firm defeat.

Whether he managed to come up with any answers for his side to find a way back into the championship race for his side is another matter as Celtic surged seven points clear at the top of the table.

Rangers, without doubt, are in big trouble. Not for the first time this season, they find themselves in a position where any further slip-ups in the league would just about end their title challenge.

And the biggest problem Smith faces is the fact the financial resources just aren't there to allow him to go out in the January transfer window and improve his team to try and boost their title ambitions.

While Gordon Strachan will possibly sign two or three players during January to bolster his team as they close in on a fourth consecutive title, Smith is more likely to see players leaving Ibrox rather than arriving.

Although only one goal separated the teams on Saturday during a game deprived of any real quality with the exception of Scott McDonald's stunning goal, it was proof enough that Rangers require fresh faces to be brought in.

If the funds were in place, Smith would have to go out and sign a left-sided midfield player as that, clearly, is his biggest problem. At the weekend, he surprised most by bringing Charlie Adam in from the cold.

Make no mistake about it, Smith would much rather be sending out someone such as Shaun Maloney or Aiden McGeady, but those types of players cost money that just isn't there.

It's the same story behind the reason he hasn't managed to sign the central defender he believes his team requires and also why he has continued to go with Sasa Papac as a makeshift left-back. If you go through the Rangers starting line-up from the weekend, there are several players who just aren't up to the mark.

Once again, Steven Whittaker was like a fish out of water. Kirk Broadfoot, who has performed excellently at right-back, struggled and lost McDonald far too easily for the Celtic goal.

Davie Weir continues to struggle and Papac doesn't give enough on the left of the defence.

Adam, who is expected to leave Rangers next month, struggled badly and although Barry Ferguson, Pedro Mendes and Steven Davis weren't at their best, they can at least hold their own.

In attack, Kris Boyd and Kenny Miller were pretty much ineffective, although to be fair to them they've been impressive for most of the season.

Sometimes, on the back of an Old Firm defeat, reactions can be over the top. And, in truth, there wasn't much between Rangers and Celtic on Saturday. It came down to two key moments in the game.

At one end, Kris Boyd finds himself bearing down on goal with only Artur Boruc to beat and failed to find the back of the net. At the other end, Scott McDonald produces a moment of magic to find his side ahead.

It is such a thin line between victory and defeat in these games. But it was the response from Rangers, knowing they were on the verge of allowing their title rivals to open up a healthy gap at the top of the table, which would have concerned Smith.

There was no great urgency to go and take the game to Celtic, no real thinking behind trying to find a way past a defence that was mopping up the high balls that were being shelled up the park and no real creativity or quality in their play.

In the end, Celtic cruised to victory. Smith, you can rest assured, would have gone over all these issues.

Perhaps, he will have different opinions but he certainly agrees that his team really can't afford to lose any further ground on Celtic.

"There is no margin for error now," admitted the Rangers manager. "Celtic deserve credit for their consistency over the season which has led to that, but we are now seven points behind.

"It's important we don't drop any more and that's something we will have to deal with."

Smith didn't think there was much between the two teams at Ibrox, although he admitted Kris Boyd's failure to finish their one and only clear-cut chance during the game always left them open to losing one at the other end.

He said: "We played very well in the opening period, but when you don't take chances in an Old Firm match you always know something could be around the corner.

"When we lost the goal it meant Celtic could sit back and defend a bit deeper. They did that very well and restricted us to few opportunities. But it was disappointing from our own point of view."