Sterling rose against the dollar and euro on Tuesday as investors focused on possible inflows from corporate take-over activity and strong British economic fundamentals.
Data showing the weakest rise in mortgage approvals since April and a Nation-wide Building Society survey showing house prices rising at their slowest pace for eight months in January were shrugged off. Analysts said more emphasis was being placed on a robust British outlook and the prospect of further monetary tightening.
"Sterling is looking attractive. The consumer sector is holding up well and wage increases are coming in above inflation, and the Bank of England is sensitive to those issues," said Ian Stannard, senior FX strategist at BNP Paribas.
Sterling was up 0.15 percent on the day at $1.9617. It was around 0.1 percent higher at 66.02 pence per euro. Sterling hit its highest against the yen in almost a week at 240.05.
The Bank of England said mortgage lending rose by 10.58 billion pounds last month, up from an upwardly revised 10.034 billion increase in November and well above the consensus forecast for a 9.5 billion gain.