The World - News from Aug. 28, 1988

Iceland’s coalition government took emergency action to freeze prices and suspend scheduled wage hikes until the end of September--a move officials say is only the first step toward more drastic economic measures. The government also directed the central bank to begin talks with commercial banks to lower interest rates. Most employees were expecting a 2.5% wage hike on Sept. 1. Finance Ministry officials said the government’s action is designed to give authorities one month to devise a way to reduce inflation.