The official interest rate, or bank rate as it’s often known, is the interest rate paid to banks that deposit cash with the Bank of England. Commercial banks in the City or on the high street set customer rates based on the official interest rate. They do not have to charge the same rate - they decide what to charge borrowers and pay savers. Sometimes the rate is expressed as ‘bank rate plus one per cent’, which means a borrower pays the BoE base rate plus one per cent.