Pep Guardiola’s side were often the aggressors on Merseyside and created several opportunities from the lion’s share of possession, but a clinical display secured all three points for the hosts.
Goals from Fabinho, Mohamed Salah and Sadio Mane put them in a commanding position and though Bernardo Silva pulled one back with 12 minutes remaining, it was all we could muster by way of a response.
City were rocked by two goals in the opening 15 minutes.
VAR ruled against a penalty after the ball hit Trent Alexander-Arnold's hand in the build-up to Fabinho’s 25-yard opener, before Salah nodded home Andy Robertson’s cross.
We remained very much in the game, however, with Aguero forcing a good save from Alisson and Angelino seeing an effort divert off the post.
Mane’s header looked to have put the result beyond doubt and though Bernardo’s sweetly struck effort crept inside the upright to give City a lifeline, Liverpool held on to their lead, with the visitors having a second penalty appeal waved away when the ball hit Alexander-Arnold's arm.
The defeat leaves City fourth in the Premier League, behind Chelsea, Leicester and Liverpool, who have an eight-point advantage at the top.