• Cable rises to 1.2679 on much better than expected UK retail sales data

• Jan retail sales up 1.7% MM vs 0.3% f/c (Dec retail sales revised down 0.3%)

• 1.2679 is highest level since Dec 18. 1.2674 was Asia high (pre-UK data)

• Retail sales beat underpins expectation of BoE interest rate hold in March

• UK Jan budget surplus lower than expected: 15.4 billion pounds vs 20 bln f/c

• UK Feb flash PMIs due 0930 GMT: services PMI f/c at 50.8; mfg PMI f/c 48.4

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(Robert Howard is a Reuters market analyst. The views expressed are)