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Two goals from Giorgi Guliashvili and a fine solo effort from Giorgi Gocholeishvili stunned England and claimed a well-deserved win for Georgia, who failed to qualify for the most recent European Championship but will co-host the finals in 2023. England scored two late goals but deserved little from the game.
Balogun and Angel Gomes both had half-chances going forward but it was the hosts who took a surprise lead.
England failed to properly clear a corner and, as the ball came back in and Luke Thomas blocked one effort from the edge of the box, Georgian No9 Guliashvili was on hand to fire a fine low strike into the far corner.
Things got worse for Carsley when, just after the half-hour mark, Balogun went down needing treatment on the edge of the box and could not continue.
The Arsenal man, who scored on his first start against the Czech Republic last week and had fired one into the side netting here, was replaced by Leeds youngster Sam Greenwood.
Carsley had the break to organise his side and mount a comeback, but England found themselves two down within two minutes of the restart, Guliashvili getting in behind far too easily and firing past Etienne Green in the England goal, though there was a hint of offside in the build-up.
Full-back Gocholeishvili further embarrassed England with a stunning solo run from wide right, into and across the box before finishing for Georgia’s third.
Stuttgart defender Clinton Mola saw his late header deflect in off Greenwood to pull one back for the visitors on his debut before Crystal Palace’s Marc Guehi also headed in from a corner in injury time, but it was a desperately disappointing afternoon for Carsley.