Percent change and percentage points are not the same.
How to work out a percentage increase or decrease, why a rate going from 4% to 5% is a rise of 25%, and how percentage difference differs again.
By Suraj Kumar4 min read
Prices rise by a percentage, rates rise by percentage points, and the two are often mixed up in headlines. Here is how each is worked out.
Percentage change is measured against the start.
Take the old value from the new, divide by the old and multiply by 100. From 80 to 100 is 20 ÷ 80 = 25% up; from 100 to 80 is 20 ÷ 100 = 20% down. The same gap is a different percentage depending on where you start.
Points are the plain gap between two percentages.
When an interest rate goes from 4% to 5%, it has risen by 1 percentage point, which is a rise of 25% on the 4%. Turn on “The numbers are percentages” on the page and both are said in one sentence.
Percentage difference has no before and after.
To compare two values with neither first, such as two shops' prices, divide the gap by their average. 80 and 100 differ by 20 ÷ 90, about 22.22%. The page gives this under the change.
Further reading
Topics: percentage change · percentage points · percent increase · percent decrease · percentage difference · percent change formula
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