Edin Dzeko's second goal in consecutive Premier League matches cancelled out Jordan Henderson's thumping opener and ensured that Liverpool and Manchester City went in level at half time after an enthralling 45 minutes of football at Anfield.
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Despite Manchester City enjoying plenty of early pressure, it was Liverpool who carved out the first clear-cut chance on eight minutes.
Philippe Coutinho, collecting the ball in the middle of the park, split the City back four with a through ball that found Adam Lallana. However Joe Hart was out quickly to deny the former Southampton man, who could have done better with the opportunity.
Lallana then thought that he had given his side the lead when he lashed home Coutinho's near-post cross from an acute angle just a minute later, only to see his effort ruled out for offside.
The Reds did not have to wait long to go ahead as the lively Coutinho robbed Vincent Kompany of the ball in midfield and teed up a swift Liverpool counter-attack that culminated with Henderson curling home a fierce effort from 20 yards.
The breathless start to the game continued when Sergio Aguero latched onto David Silva's ball over the top and clipped an effort round Simon Mignolet, but against the far post.
With City's defence at sixes and sevens, Liverpool could have been two ahead when Coutinho's sublime pass with the outside of his boot found Raheem Sterling, who coasted around Eliaquim Mangala and fired a low ball across the six yard box, but there was nobody in a red shirt to take advantage.
The hosts then surrendered their lead when Aguero's run and reverse ball from the edge of the Liverpool box found Dzeko, who swivelled and fired beyond Mignolet with aplomb.
It was Liverpool who ended the first half on top, though, and they could have retaken the lead when Lazar Markovic's lobbed pass found Lallana, who took the chance first time on the turn, but could only send his effort wide of the far post.
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