4 ms·

You are half right. Per the article body, contradicting the headline, the rates increased by 0.75pp, which is equivalent to 75bp. The previous rates ranged from

You are half right. Per the article body, contradicting the headline, the rates increased by 0.75pp, which is equivalent to 75bp. The previous rates ranged from 0.75% to 1% making the 0.75pp hike a 75-100% increase, not the 0.75% increase you and the incorrect headline claim.

adammarples 4y ago
Nobody ever talks about rate increases in terms of their ratio to the previous rate (ie. talking about a 75-100% rate increase), this would be insanely confusing and irrelevant. To avoid confusion, people always discuss the absolute additive change in the base rate itself. ie., 75bp or 0.75%, which are equivalent.
- randomdata 4y ago
  > Nobody ever talks about rate increases in terms of their ratio to the previous rate. Uncommon in finances, but quite common in other domains. The mathematics involved do not change across those domains. > this would be insanely confusing. What is confusing about it? Knowing that the rate increased by, in this case, 100% or 0.75pp provides the same information if you know the previous rate. You must know the previous rate in order to determine the new rate either way. You are quite right that the percentage point (pp), rather than the percent (%), is often the exact information people want to know. It is why the information is provided as a percentage point (pp) and not a percent (%). It may be also be provided as basis points (bp), but that is the same as a percentage points (pp) except multiplied by 100 to make working with fractions of a percentage point (pp) easier. > 75bp or 0.75%, which are equivalent. They can be equivalent. An increase from 100% to 100.75% is a 75bp, 0.75pp, and 0.75% increase. However, that is not generally true. A 1% to 1.75% increase is a 75bp, 0.75pp, and 75% increase. What is certain is that the difference between two numbers does not produce a percentage. That is not how percentages work.

adammarples 4y ago

Nobody ever talks about rate increases in terms of their ratio to the previous rate (ie. talking about a 75-100% rate increase), this would be insanely confusing and irrelevant. To avoid confusion, people always discuss the absolute additive change in the base rate itself. ie., 75bp or 0.75%, which are equivalent.

randomdata 4y ago
> Nobody ever talks about rate increases in terms of their ratio to the previous rate. Uncommon in finances, but quite common in other domains. The mathematics involved do not change across those domains. > this would be insanely confusing. What is confusing about it? Knowing that the rate increased by, in this case, 100% or 0.75pp provides the same information if you know the previous rate. You must know the previous rate in order to determine the new rate either way. You are quite right that the percentage point (pp), rather than the percent (%), is often the exact information people want to know. It is why the information is provided as a percentage point (pp) and not a percent (%). It may be also be provided as basis points (bp), but that is the same as a percentage points (pp) except multiplied by 100 to make working with fractions of a percentage point (pp) easier. > 75bp or 0.75%, which are equivalent. They can be equivalent. An increase from 100% to 100.75% is a 75bp, 0.75pp, and 0.75% increase. However, that is not generally true. A 1% to 1.75% increase is a 75bp, 0.75pp, and 75% increase. What is certain is that the difference between two numbers does not produce a percentage. That is not how percentages work.