Glossary
Percentage point
The unit used for the plain arithmetic difference between two percentages: a move from 4 percent to 5 percent is a rise of 1 percentage point.
Updated September 15, 2026
A percentage point is the unit for the simple difference between two percentages. If an interest rate moves from 4.37 percent to 4.63 percent, that is a rise of 0.26 percentage points.
The wording matters because the same change can be described with very different numbers. A rate that goes from 4 percent to 5 percent has risen by 1 percentage point, and that is also a 25 percent increase in the rate itself, because 1 is a quarter of 4. Saying "percentage point" keeps those two ideas apart. One percentage point is also written as 100 basis points, so 0.25 percentage points is 25 basis points.
You meet the term in news about interest rates, inflation and fund fees, where the differences are small and the unit changes what the sentence means.
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How this definition was made
- Written by an AI model (Claude) following Teloria's editorial standard.
- Every factual claim was checked by a separate AI fact-check against official US government and regulator sources.
Official sources consulted
- bls.gov · /cps/methods/calculating-standard-errors-and-confidence-intervals.pdf
- bls.gov · /cpi/factsheets/calculating-percent-changes.htm
- investor.gov · /introduction-investing/investing-basics/glossary/basis-point
- federalreserve.gov · /newsevents/pressreleases/monetary20250917a.htm