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Have heard this term so many times, and decided to know it today I am glad I did, because it is so easy a concept, and according to me sounds very powerful and scholarly (when you mention it)

So when a change in a parameter we measure is from 5% to 6%, it would typically be a 20% increase in the normal sense. But using basis points, all arithmetic can be avoided to conveniently say 100 basis point = 1% percentage point.

1 basis point = (1/100)*(1%).

So 100 basis points = 100*(1/100)*(1%) = 1% percentage point

Neat!!

So if interest rates have been raised by 25 basis points = 0.25% percentage points => if the interest was 2.5%, now it will be 2.75%

Ah, finally I feel enlightened on this term.