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The article states that they increased rates by 0.5pp, not 0.5%, but probably not. Rule of thumb says that interest rates need to exceed the rate of inflation t
by randomdata 4y ago
The article states that they increased rates by 0.5pp, not 0.5%, but probably not. Rule of thumb says that interest rates need to exceed the rate of inflation to see inflation come down.
- deleted 4y ago[deleted]
- mejutoco 4y agoI checked and it mentions 50 basis points and a basis point is "is equal to 1/100th of 1% or 0.01%", so for 50 bp 0.5% seems right.
- randomdata 4y ago50 basis points is 1/100th of a percentage point (pp), not a percentage (%).
- phylomortis 4y agoWhat are you talking about? 50 basis points is 0,5%.
- randomdata 4y agoIt can be. 50bp is always equivalent to 0.5pp, but only sometimes equivalent to 0.5%. A % increase is dependent on relative change. The increase from 0.25 to 0.75 talked about in the article, for example, is a 200% increase, a 0.5pp increase, and a 50bp increase. The difference between 0.75% and 0.25% is not represented as a %. That is now how % is calculated.
- illiac786 4y agoYou did not define what your percentage applies to in your comment. Everyone here is talking about interest rate, not interest rate increase rate.
- randomdata 4y agoThe topic of conversation here is how the European Central Bank increased rates by 0.5 percentage points, which may also be stated as 50 basis points as a percentage point is 1/100th of a basis point. The European Central Bank did not raise any of its rates by 0.5 percent. The previous commenter, among others, merely mixed up percent (%) and percentage point (pp), is all. It's a common mistake, editorialized headline included.