Most Moroccans speak little, or no, English. However, this is beginning to change. Morocco is realizing the worldwide importance of English. Since 2003, private schools (but not public schools) have introduced English-language study in elementary schools, as a required course, starting at about age 10. Formerly, English was not available as an elective until high school. Some new American schools have opened in Marrakesh and Agadir these past few years, boosting the number of English speakers in the south.
Tourists will often hear English in the souk (traditional Moroccan shopping area); however, most of the English vocabulary is limited to tourist topics (as opposed to societal, or newsworthy topics).
English is more widely spoken than it used to be. Three-star hotels and up will usually have someone at the front desk who is somewhat proficient in English. Professional/medical people can usually be found in the city, who do have sufficient English, although it does take some time to locate them. Check with other ex-pats in your location.
Part III: Morocco's Official Languages
Morocco has two official languages, which are not always used interchangeably in the public sector. Officially, the language of Morocco is Arabic (sometimes known elsewhere in the Arab world as Modern Standard Arabic).
If you are completing any legal documents (such as a house contract, or rental contract), they will need to be in Arabic, as opposed to French. The reason for this is that all of the Moroccan court system is conducted only in Arabic.
The second official language is French. Depending upon the orientation of a company, business is often conducted in either French, Arabic (most often Diriga for speaking, and Classical for written work-see discussion below), or both.
French
In my experience, because French is generally much easier for most foreigners to manage to learn to communicate in than Classical Arabic, I recommend spending as much time as possible on learning a bit of French before arriving in Morocco. Furthermore, in Morocco, most of the business or street signs that foreigners need to read are written in French (as opposed to being exclusively in Arabic, as in other Arabic countries). Alternatively, there will be a sign posted for illiterate people that is readily understandable. For example, a dentist will hang up a sign which is a color picture-drawing of dentures!
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