P.M. BRIEFING : British Deficit Rises Slightly

Britain’s balance of payments deficit rose slightly in June to almost $2.5 billion after a gap of $2.4 billion in May, the government reported today.

The increase was in line with forecasts, and financial markets generally took the view that the government was still moving in the right direction to narrow the gap.

The Central Statistical Office data showed the merchandise trade balance for June was almost $2.8 billion in the red compared with a shortfall of just over $2.8 billion in May.

The trade deficit was offset by a $363-million surplus on so-called invisible items such as shipping, insurance and tourism.

With a stronger pound making imports cheaper and exports more expensive, the fact that the increase was within expectations brought relief to financial markets, and the pound rose a third of a cent against the dollar to $1.8180 at midday.