The Bank of England has a statutory responsibility for setting the UK's official interest rate, known as Bank Rate, a decision which is made by the Bank's Monetary Policy Committee (MPC).
The MPC has to discuss what rate is required in order to meet specific inflation targets, set annually by the Chancellor of the Exchequer. Once a majority decision has been made, the Bank must implement the new interest rate, that is the rate at which the Bank lends to other banks and other financial institutions, via its financial market operations.
Bank and building society products may track the Bank Rate, with the rate also affecting the interest available on other financial products, such as savings accounts.