Liverpool manager Brendan Rodgers has confirmed the club are in talks to sign Inter starlet Philippe Coutinho.

Goal.com confirmed over the weekend that the Reds have agreed an £11.7 million fee with the Nerazzurri for the Brazilian playmaker, although Rodgers was keen to stress that the deal is a long way from being completed.

“There’s been talks between the clubs but that’s about it, so nothing to report,” the Northern Irishman told reporters.

Rodgers saw his side dumped out of the FA Cup at the hands of League One side Oldham on Sunday, but he dismissed claims that such a defeat meant he would have to bring new players in, instead claiming that it could be used to improve the players he already has.

“It was very disappointing yesterday,” he admitted.

“There’s no doubt, and I know it’s a part of the growing pains that we have in terms of going forward but it’s something that we’re fully aware of and we know in this window it’s never going to be fulfilled.

“It was another marker in the fact that we want to develop the group and improve the group and that’s something I’m sure we’ll deal with in the coming windows.”

Joe Allen has described Liverpool’s FA Cup fourth round defeat at Oldham as the “worst feeling in football”.

The Reds’ defeat at Boundary Park was they first time they have lost an FA Cup tie to a team from outside the top two tiers since Bolton won a third-round replay at Anfield in January 1993.

The former Swansea man has dismissed claims that the changes made by Brendan Rodgers for the game could be used as an excuse for their performance and the result.

“It’s the worst feeling in football,” Allen told The Liverpool Echo. “These are the kind of games you have to be on it mentally for the whole game but we started slowly.

“To concede three goals in the manner we did was bitterly disappointing.

“We still had a strong side out. The manager made changes but for those of us who came in it was a chance to impress and stake a claim. A lot of people will look at themselves and be disappointed that they didn’t take that chance as well as they could have.

“I don’t think we underestimated them. But, no direspect to Oldham, when you’ve been knocked out by a team in League One, then something has definitely gone wrong somewhere.

“It hurts and I feel sorry for the fans. Once again, they turned up in their thousands and they have gone home very disappointed.”

Thomas Vermaelen should be back in the Arsenal defence after missing out against Brighton with an ankle injury.

Mikel Arteta (calf) is scheduled to return for the game, but either Abou Diaby or Aaron Ramsey may play instead with the Spaniard lacking full match fitness.

Francis Coquelin (hamstring) may well miss out for the hosts, as will reserve goalkeeper Lukasz Fabianski (ankle). Gervinho is absent as he is on international duty with the Ivory Coast at the Africa Cup of Nations.

Some of Liverpool’s younger players may be dropped by Brendan Rodgers after the manager said he felt “let down” by them during Liverpool’s shock 3-2 FA Cup defeat away to Oldham on Sunday.

Jose Reina (hip) is expected to miss out, so Brad Jones should keep his place despite a bad mistake to gift Oldham their second goal.

Andre Wisdom will probably continue at right-back in the absence of Jose Enrique, with Glen Johnson filling in at left-back – although Johnson himself is struggling with a hamstring injury.

Martin Kelly (knee) is a long-term absentee, and is only expected back at the end of March.

• The Gunners only have one win (West Ham) from their last four league games, drawing with Southampton and losing to Chelsea and Manchester United.

• Arsene Wenger’s side have also lost two of their past five league home games, but won the other three.

• Theo Walcott (pictured, right) leads the club’s goalscoring charts with 17 in all competitions, and has just signed a new deal with the club.

• Liverpool’s away league form has been poor this season, with three wins, four draws and four defeats.

• Brendan Rodgers’ side have lost three of their last five away games, but have won the other two.

• Luis Suarez is integral to liverpool’s goal output – he has 21 in all competitions, and his nearest team-mate is Steven Gerrard with just six.

• Both Arsenal and Liverpool have conceded fewer goals than league leaders Manchester United, but are 19 and 22 points behind them respectively.

• Liverpool won 2-0 at the Emirates in the league last season courtesy of an Aaron Ramsey own goal and a Luis Suarez strike.