Percentage Points vs Percent Change
Understand the critical difference between percentage points (pp) and relative percent:
STEP 01
Percentage Point (pp)
Absolute arithmetic difference between two percentage values (Rate 2 - Rate 1).
STEP 02
Relative Change (%)
Relative proportional change measured against the starting rate ((R2 - R1) / R1).
STEP 03
Basis Points (bps)
Financial metric equal to 1/100th of 1% (1 percentage point = 100 bps).
STEP 04
Avoid Confusion
Clear notation for economics, bank interest rates, and polling surveys.