Preheat an oven to 375 degrees F (190 degrees C). Soak raisins in water for 10 minutes; drain and set aside. Line a baking sheet with parchment paper.
Whisk together the flour, sugar, baking powder, and salt in a mixing bowl. Cut in the butter with a knife or pastry cutter until the mixture resembles coarse crumbs. Stir milk into the flour mixture until moistened. Add the drained raisins. Turn the dough out onto a lightly floured surface and pat or roll the dough out into a 3/4 to 1-inch thick round. Cut dough with a biscuit cutter and place onto the prepared baking sheet. Beat the egg with 1 tablespoon water in a small bowl. Brush egg mixture on each biscuit.
Bake in the preheated oven until golden brown, about 15 minutes.
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