MANCHESTER CITY are refusing to reduce their asking price for Kalvin Phillips, with Newcastle United having been unable to agree an early transfer window deal for the England midfielder.

Newcastle are hoping to sign a new central-midfielder this month, and have identified Phillips as their leading target.

With the Premier League’s Financial Fair Play rules limiting the Magpies’ ability to make permanent additions during the January window, the St James’ Park hierarchy are hoping to engineer a loan deal for the 28-year-old.

However, while Manchester City boss Pep Guardiola is willing to sanction Phillips’ departure this month, Etihad chiefs are adamant they want the best possible deal.

City are understood to be demanding around £5m as a loan fee before they will agree to a deal to the end of the season, and are also believed to be insisting that a loan will only be sanctioned if it is accompanied by a clause effectively guaranteeing a permanent transfer in the summer.

That is problematic for Newcastle, both in terms of FFP restrictions and the fact that Sandro Tonali is due to return from his ten-month suspension for breaching betting regulations in August. While the Magpies are willing to consider the permanent purchase of another central midfielder in the summer, they do not want to find themselves in a position where they have to sanction a costly purchase no matter what happens in the intervening period.

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They will remain in dialogue with Manchester City officials over the next couple of weeks, but are aware of mounting interest from elsewhere.

Juventus remain extremely interested in taking Phillips to Serie A, but with the former Leeds midfielder determined to do all he can to retain his place in Gareth Southgate’s England squad for next summer’s European Championships, his preference would be to remain in the Premier League if possible.

Having joined Manchester City in a £42m move from Elland Road in the summer of 2022, Phillips has been unable to carve out a place in Pep Guardiola’s plans. He has played less than 90 minutes of Premier League football this season, with Guardiola turning to Rico Lewis, Matheus Nunes and Mateo Kovacic ahead of him.

There could be an outgoing from St James’ Park this month, with Preston understood to be lining up a move for on-loan Magpies midfielder Isaac Hayden.

Hayden is currently on loan in Belgium, playing for Standard Liege, where he has started nine of the club’s 14 league matches so far this season.

However, there is growing talk of a potential return to England for the 28-year-old, with Preston keen to discuss the possibility of a loan move to Deepdale for the second half of the campaign.

Hayden does not have a future within Newcastle’s first-team squad, but the Magpies would be willing to accommodate a return to England provided the financial aspect of any deal adds up.

While the transfer window will dominate much of Newcastle’s thinking in the next month, the club’s immediate priority is Saturday’s Wear-Tyne derby with Sunderland in the third round of the FA Cup.

Callum Wilson is expected to miss the game with the hamstring injury that ruled him out of Monday’s defeat at Liverpool, with the England international also unlikely to feature in the following weekend’s Premier League home game with Manchester City.

Joe Willock, Harvey Barnes and Elliot Anderson are also expected to miss both matches, but Kieran Trippier has a chance of returning for Saturday’s derby game at the Stadium of Light.

Trippier was an absentee at Anfield because of a groin issue, but the right-back is hoping to be able to return to training in the next couple of days in order to make himself available for Newcastle’s first meeting with their North-East rivals for almost eight years.