Mercedes Technical Director James Allison has conceded the team will pay special attention to McLaren's "unusual" improvement since adding a major upgrade package.
The new parts were fitted to Lando Norris' MCL60 at the Austrian Grand Prix, where the Briton finished fourth, before teammate Oscar Piastri received the package at Silverstone a week later.
Both McLarens made the top three in qualifying, before Norris clinched second in the race ahead of Mercedes' Lewis Hamilton and rookie Piastri, who was taken out of podium contention by an ill-timed Safety Car.
The rapid improvement in performance since switching to a Red Bull-esque aerodynamic design has thrust McLaren into the heart of the battle to finish runner-up behind the runaway Constructors' championship leader, though the points difference to fourth-place Ferrari sits at a sizable 98 points.
Addressing F1's in-season development race, Allison explained: "We are only just round about halfway through the season and there is plenty more development to come in these cars.
"All of the teams will of course be turning their attention to next year and that will defang all of us a little bit in terms of the rate of which we can improve our cars.
"There are absolutely improvements that we would like to make on our current car that we know will also carry into next year. So it doesn’t feel like throwing good money after bad.
"The feeling is that you are investing in both seasons with those upgrades. For us yes, you will see the upgrades coming for a little while longer. I suspect for the others too.
"What you will get in this next sequence of races is a little bit of yoyoing for position in a very closely packed bunch as upgrades make the difference for one team for a while until someone else will come out of sequence with another upgrade a race or two later to even things back out.
"Where it will all settle down for the final quarter to one-third of a season, we will see. Hopefully, we will have our noses in front and be able to have a strong second half of the season."
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Insisting Mercedes would take note of McLaren's progress, Allison added: "We keep an eye on all the teams as they upgrade. We take lots of photos and we try and figure out what changes from race to race.
"We note when something new or unusual comes along. The interesting and unusual thing about the McLaren upgrade is that its lap time effect is quite strong.
"It's unusual to have a step of that size of relative competitiveness in the middle of a season and chapeau to them. They've done a good piece of work there, but that also makes it interesting for us because we have the before and after shots and we know the lap time effect was big.
"So it’s well worth us paying more attention than we normally might to another competitor team's upgrade because in this case, we know that whatever changed has made a meaningful difference to their lap time.
"It’s quite useful for us to know what that was and see whether it can play into our own thoughts of developing our own car."