Spell Check not Working on Android 4.0.3

[Guest anyusername]

I've flashed my phone with Huawei official Android 4.0.3 update and now spell check doesn't work. I have set language to English (United Kingdom) and set keyboard to 'Use system language'. When entering text, many of the words I enter get underlined red, even though they are spelt correctly. Tapping on the underlined word brings up correction suggestions, but the word is never in it. I've attached a screenshot, where the only suggestions are words or names that are in my address book:

I've tried different keyboards, such as Swiftkey and Swype, but they all have the same behavior.

Can anyone suggest a fix to this?

[Guest Davidoff59]

if you have rooted, do a search for dictionary fix as the instructions are here already