Sterling received some upbeat UK economic data this morning which saw it rise sharply against the US dollar. House prices in the UK unexpectedly rose in August easing concerns that the housing market might falter in the second half of the year. According to Halifax, house prices rose by 0.2% in August, ahead of estimates which pointed to a 0.5% decline in prices. The increase in housing prices is particularly pleasing as recent reports from RICS and Nationwide suggested that house prices were on the decline. Martin Ellis from Halifax is of the view that ‘the improved economy, strengthening labour market and low interest rates are all supporting housing demand. We expect that UK house prices will remain static overall in 2010.’ [1] In addition, UK industrial and manufacturing production increased by 0.3% in July, which was broadly in line with market forecasts and helped sterling to keep the gains received off the back of the housing data. M&A chatter may also support sterling in the short-term as Vodafone has sold a $6.6 billion stake in China Mobile, which implies the company may repatriate those funds back to the UK in sterling. David Choe, London