UPDATE 2-UK shares edge higher on bets of economic recovery; Barratt surges

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* Barratt Development jumps on dividend payout plans
* London declares emergency over spread of new coronavirus
strain
* Marks & Spencer likely to see further fall in sales - CEO
* FTSE 100 up 0.2%, FTSE 250 adds 0.3%

(Updates to market close, adds comments)
By Shashank Nayar and Shivani Kumaresan
Jan 8 (Reuters) - Britain's FTSE 100 index inched higher on
Friday to end the week with gains of more than 6% as investors
bet on a swift economic recovery, while Barratt Developments
surged on plans to resume dividend payouts next month.
The UK's biggest homebuilder BDEV.L jumped 4.5% to the top
of the FTSE 100 index .FTSE after it also posted a rise in
forward six-month sales. The blue-chip index gained 0.2%, led by consumer
discretionary and industrial stocks.
Neil Wilson, chief market analyst at Markets.com said more
U.S. stimulus could mean more lending and borrowing resulting in
higher bond yields which bodes well for equity prices.
"There is overall positivity about the phase of where the
(UK) economy is heading and positive feelings about stimulus in
the U.S.."
British blue-chips have gained nearly 38% from their record
lows hit in February last year and are 10.6% away from their
2020 highs, as huge global stimulus measures boosted risk
sentiment.
Britain's medical regulator approved Moderna 's MRNA.O
COVID-19 vaccine for use, and has agreed to purchase an
additional 10 million doses as it eyed a spring rollout of the
shot. The domestically focussed mid-cap index .FTMC rose 0.3%.
Britain reported 1,325 new deaths from COVID-19 on Friday,
its highest daily figure since the outbreak of the pandemic, as
the country struggled to stem rising infections from a new
highly transmissible variant of the coronavirus.
London, meanwhile, declared a major incident on Friday with
hospitals at risk of being overwhelmed by COVID-19 patients.
Clothing retailer Marks & Spencer MKS.L fell 2.4% after
its CEO said the company is likely to see a further
deterioration in sales in its clothing and homewares division in
the current quarter due to the latest national
lockdown.