P.M. BRIEFING : UK’s August Deficit Is 3rd-Worst

LONDON —  Britain today notched up its third worst monthly current account deficit--a gap of $3.2 billion in August.

The deficit was a fractional improvement over a revised shortfall of $3.54 billion in July but was much larger than economists had expected.

The pound fell on the news by almost one cent to $1.6050 but recovered soon afterward and by mid-morning in New York was trading at $1.6210.

Financial analysts said the deficit in the current account--a balance of payments for imports and exports and invisible items such as banking, insurance and tourism--was a blow to the Conservative government’s hopes of cooling the economy through its policy of high interest rates.