non-breaking spaces ( ) appear as little square boxes

Setup: CKEditor version 4 is running in Internet Explorer 8. 

I have a strange issue where non-breaking spaces (nbsp;) appear as little square boxes. It seems to only happen when they are not wrapped within an HTML element. 

I copied and pasted one from the editor here and they appear as triangles with question marks in them (in the editor):

�

I have attached an image which contains the HTML source of the content and the editor with the square box.

Thank you in advance!