Sterling off 2-mo lows vs dlr but UK data weighs

* Sterling flat at $1.5598 GBP=

* OBR forecasts to show deficit plan broadly on track

* UK mortgage approvals falls to 8-month low in Oct

LONDON, Nov 29 (Reuters) - Sterling came off a two-month low versus the dollar on Monday as the EU approved an 85 billion euro rescue for Ireland and outlined a permanent system to resolve Europe's debt crisis.

But gains were subdued as data showed worrying signs for the UK housing market. The number of mortgage approvals in Britain fell to its lowest in eight months in October [ID:nBELTME62M], while separate data showed a fall in house prices. [ID:nLDE6AP0Q1]

"With housing market activity this weak, we suspect that the recent house price falls have much further to go," said Vicky Redwood, economist at Capital Economics.

By 1012 GMT, sterling was little changed from late U.S. trade on Friday at $1.5598 GBP=D4. Technical analysts said the pound could remain under pressure after trading below its 100-day moving average, at $1.5706.

Earlier in Asian trade, the pound fell to $1.5560, its lowest since late September on concerns that Europe's financial crisis could spread to other countries. Declines were accelerated after stop-loss sales were triggered below $1.5590, traders said.

"Basically we are little changed from where we were late last week, with the package broadly as expected. The issue of the peripheral countries will continue to bubble, but equally the market got too pessimistic about the U.S. economy," said Adam Cole, global head of FX strategy at RBC Capital Markets.

Against the euro, the pound edged up 0.3 percent to 84.65 pence EURGBP=D4, not far from a two-month peak of 84.20 pence hit on Friday.

Britain's fiscal watchdog is expected to say on Monday the coalition government's deficit reduction plan is achievable, and raise its growth forecast for this year, though some economists think the projections may be too optimistic.

The Office for Budget Responsibility (OBR) will probably raise its 2010 growth forecast to around 1.8 percent from 1.2 percent, and say borrowing this year could come in below the previous forecast of 149 billion pounds. [ID:nLDE6AR0EQ]

"The upward revision to growth this year might be accompanied by a small downward revision in the forecast for public sector net borrowing, but we do not expect the revisions to give rise to any notable changes to the government's fiscal plans," said Simon Hayes, economist at Barclays Capital.

Finance minister George Osborne has pledged to cut the record deficit of 11 percent of GDP in four years.

Other data showed broad M4 money supply growth was 0.7 percent in October, but the annual rate fell sharply to -0.7 percent -- the lowest since the series began in 1983.

"Sterling will continue to take its cue from economic data, as the market weighs the risk of further quantitative easing, given the Bank of England's three-way split" on monetary policy, RBC's Cole said.

Minutes from the Nov. 3-4 Monetary Policy Committee meeting showed the same vote as in October when one member wanted more stimulus, another wanted a rate hike and the rest opted for unchanged policy. (Reporting by Tamawa Desai; Editing by Toby Chopra)