Liverpool’s Premier League title hopes were dealt a potentially fatal blow as they slumped to a 2-0 defeat to city rivals Everton in an exhilarating Merseyside derby.

Dominic Calvert-Lewin's header made sure of the Toffees’ victory – their first in a derby at Goodison Park since 2010 – after Jarrad Branthwaite had poked them ahead.

Luis Diaz came closest to launching a Liverpool comeback, but struck the post, leaving Jurgen Klopp's side with just one win from their last four top-flight outings.

Defeat leaves the Reds three points behind league-leaders Arsenal with four games left, with third-place Manchester City yet to play, while Everton moved eight points clear of the relegation zone.

Everton dominated the early stages and thought they had the chance to take the lead from the spot after just six minutes. Alisson felled Calvert-Lewin in a one-on-one, but the striker was offside in the build-up, and the penalty was overturned after a VAR review.

The Toffees looked particularly dangerous from free-kicks, and Liverpool were given a warning when Calvert-Lewin’s thumping header was parried by Alisson.

Liverpool were left to rue their slack defending in the 26th minute as it pinballed around their box, with Branthwaite’s low shot eventually beating Alisson and spinning over the line off the inside of the post.

Jordan Pickford made three big saves to keep Everton in front at the break, denying Darwin Nunez, Diaz, and Andy Robertson as Liverpool rallied.

While the Reds made a bright start to the second half, they could not take their chances, and Calvert-Lewin punished them from a corner as he rose unmarked at the back post to thump a towering header into the bottom-left corner for his third goal in four games.

Liverpool’s best chance fell to Diaz in the 69th minute as he finally unlocked Everton’s defence, but a brilliant curler struck the right-hand post – the 22nd time Liverpool have hit the woodwork in the league this season.

Mohamed Salah also squandered a late chance, blazing over the bar from close range to sum up a wasteful night for the Reds as Everton held on for a potentially pivotal result at both ends of the table.

Dyche’s defence rallies

Each of Everton's last seven victories in the Premier League have been to nil, an impressive feat as they have failing to win any of their last 12 when conceding at least once (D4 L8).

They had to dig deep to get another vital three points in the relegation battle, keeping Liverpool at bay with impressive blocks from the brilliant Branthwaite, James Tarkowski and Ben Godfrey, as well as excellent saves from Pickford, who was on form to deny Harvey Elliott and Salah in the dying embers.

This win also ended a run of 12 without a victory against Liverpool in the Premier League at home, which was their longest such run against any other opponent in their league history.

Nine days ago, Everton were thrashed 6-0 by Chelsea. Now, after just their second derby win in over 13 years, they are within touching distance of safety.

Title hopes extinguished?

For the 22nd time in all competitions this season, Liverpool were punished for a slow start as they conceded the opening goal.

Jurgen Klopp, on his farewell tour, was aiming to become the first Reds manager to win 10 Premier League Merseyside derbies but instead suffered just his second loss against the Toffees (W9 D6).

It was just Liverpool’s second defeat in their last 27 games against Everton (W12 D13), and with Man City having two games in hand, it could have just ended their title challenge.