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Preheat oven to 425°F. and prepare a baking sheet by placing a piece of parchment over it.
Sift flour, sugar, salt, and baking powder into a large bowl.
Using a pastry blender, or two knives, cut in butter and cream cheese until the mixture resembles coarse meal.
Add egg, milk and chopped peaches. Mix with a fork until everything comes together to form a soft dough.
Roll out onto a lightly floured surface and pat into a circle about a 1/2-inch thick.
Cut into rounds with a 2-inch cookie or biscuit cutter, and sprinkle with a little bit of turbinado sugar, if desired.
Place onto prepared baking sheet, about an inch apart and bake for 12 minutes or until lightly golden.
Transfer to a wire rack and allow to cool 1-2 minutes before serving warm.