Percentage vs Percentage Points
These two terms are often confused — even by journalists and politicians. Using the wrong one leads to statements that are technically true but deeply misleading.
The core difference
| Term | Meaning | Type of measurement |
|---|---|---|
| Percentage point (pp) | Arithmetic difference between two percentages | Absolute |
| Percentage change (%) | Relative change from one percentage to another | Relative |
Example: interest rates
The Bank of England raises its base rate from 2% to 5%.
- Percentage point change: 5 − 2 = 3 percentage points. This is the simple arithmetic difference.
- Percentage change: ((5 − 2) ÷ 2) × 100 = 150%. The rate increased by 150% relative to where it started.
Both are correct. But “the rate rose 150%” sounds dramatic; “the rate rose 3 percentage points” sounds modest. They describe the same event.
Example: election polling
Party A polls at 40% in January and 45% in March.
- Rise in percentage points: 45 − 40 = 5 pp.
- Percentage change: (5 ÷ 40) × 100 = 12.5%.
A headline saying “Party A up 12.5%” is misleading — readers might think support jumped from 40% to 52.5%. The correct statement is “up 5 percentage points.”
Example: unemployment
Unemployment falls from 8% to 6%.
- Percentage point fall: 8 − 6 = 2 pp.
- Percentage change: (2 ÷ 8) × 100 = 25%.
A government might prefer to say “unemployment fell 25%” (sounds larger); critics might prefer “fell just 2 points” (sounds smaller). Same data; different framing.
When to use each
- Use percentage points when comparing two percentages directly (e.g. rates, poll numbers, proportions). This is almost always clearer.
- Use percentage change when measuring how much a value has grown or shrunk, especially when the starting value is not a percentage (e.g. revenue, population, prices).
The basis point (finance)
In finance, a basis point (bp) is one hundredth of a percentage point: 1 bp = 0.01 pp. So a rate move from 2.00% to 2.25% is a 25 basis point (25 bp) increase. This level of precision matters when dealing with interest rates and bond yields.
FAQ
Is there a difference between "percent" and "percentage point"?
Yes. “Percent” (%) is used for a relative change. “Percentage point” is used for an absolute difference between two percentages. If a tax rate rises from 10% to 12%, it rose 2 percentage points (not 2%).
How do I calculate percentage point change?
Simply subtract: new value − old value. From 4% to 7% = 3 percentage points.
How do I calculate percentage change between two percentages?
Use the standard percentage change formula: ((new − old) ÷ old) × 100. From 4% to 7%: ((7 − 4) ÷ 4) × 100 = 75%. Use the Percentage Change Calculator.
Why does the media often confuse these terms?
Percentage change produces larger-sounding numbers, which can be more attention-grabbing. Percentage point change is more accurate when comparing two percentages but produces smaller numbers. Savvy readers should check which is being used.