Thank you both for the suggestions - perhaps I was confused about how the ID of the bearing is described. If I go to an industrial bearing manufacturer, typically there is a drawing specifying what the ID is. Model shops/suppliers I'm guessing describe the bearings as being 1/8 inch when they mean 'with suitable clearance for a 1/8" axle'?
I had imagined that a true 1/8" ID bearing would give a good free running clearance for a 3mm axle, of approx. 0.2 mm across the diameter.