Raheem Sterling insists Liverpool showed enough quality and determination during their 2-1 defeat by Manchester City on Boxing Day to indicate they are capable of mixing it with the best this season.

Sterling, making his sixth consecutive start for the Reds, turned in another impressive performance, gliding forward with menace and tracking back with equal tenacity.

The 19-year-old was denied the chance to open the scoring at the Etihad Stadium when he raced through on goal in the first half but was wrongly adjudged to have been offside.

He was then unfortunate not to clinch a memorable strike at the other end, with 18 minutes remaining, when he steered Luis Suarez's cross over the bar.

However, while Sterling could not hide his disappointment post-match, the winger believes such a team performance emphasises Liverpool's competitive credentials.

"This is one of the top teams in the Premier League, so to come away and give such a strong performance just shows the belief in the team that we can go on and achieve things this year," he told Liverpoolfc.com.

"Coming away to Manchester City, we were looking to get a decent result, and we're not really too happy with losing today.

"We had our chances to win the game - there was my chance at the end as well. As a team, we're really disappointed not to come away with something today."

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Liverpool's bench were on their feet poised to celebrate when Suarez stole possession, surged forward and curled precisely into Sterling's path in the 72nd minute.

However, the youngster was unable to divert the pass under Joe Hart's bar from close range and City held on to maintain their flawless home record.

The Reds took the lead in style after 25 minutes, when an incisive move saw Sterling round the 'keeper and Philippe Coutinho convert into an empty net.

It could have been 1-0 minutes previously as Sterling broke clear to score, but his run was incorrectly flagged by the linesman.

"I looked at the replay after the game and I could see that I was clearly two yards onside," said Sterling. "That was a big chance for us to go 1-0 up in the game.

"We took the lead anyway, but that would have given us another goal advantage.

"With me it's just about confidence and so coming into the team at such a crucial point, I feel like I've just got to step up to the plate really and hopefully provide a few more goals."