What Is a Percentage Point?
Definition
Percentage point: The arithmetic difference between two percentages: a rise from 10% to 12% is 2 percentage points.
A percentage point is the difference between two percentage values. If an interest rate rises from 10% to 12%, it rises by 2 percentage points. Expressed as a percentage, the same change is (12 − 10) ÷ 10 × 100 = 20%. Keep the two apart when you read about changes in rates.
Where you meet it
Changes in values that are already percentages, such as interest, inflation or unemployment rates, are usually given in percentage points. “Inflation fell by 3 points” means the rate went, for example, from 45% to 42%.