British police said on Monday that a blast in a taxi outside a hospital that killed a man was caused by an improvised explosive device and is being treated as a terrorist incident, but the motive remains unclear.

Russ Jackson, the head of Counterterrorism Policing in northwest England, said Sunday's explosion at Liverpool Women’s Hospital was caused by “the ignition of an explosive device” that was brought into the vehicle by a passenger.

The male passenger died in the explosion and fire that followed, and the taxi driver was injured.

Jackson said “enquiries will now continue to seek to understand how the device was built, the motivation for the incident and to understand if anyone else was involved in it.”

Three men in their 20s were arrested elsewhere in the city under the Terrorism Act on Sunday, and a fourth was detained on Monday, he said.

Suspicions about a motive for the explosion have been aroused by the timing — just before 11am on Remembrance Sunday, the moment people across Britain hold services in memory of those killed in wars.

Read more: British police arrest 3 men after deadly car blast outside hospital

Jackson said investigators had not found a link to remembrance events, “but it is a line of inquiry we are pursuing.”

“Although the motivation for this incident is yet to be understood, given all the circumstances, it has been declared a terrorist incident," he said at a press briefing.

He said the passenger had been picked up by the cab a 10-minute drive away and asked to be taken to the hospital, where the explosion occurred. The driver, named locally as David Perry, managed to escape from the car. He was treated in hospital and released.

Liverpool Mayor Joanne Anderson said the taxi driver locked the doors of his cab so the passenger couldn’t leave.

“The taxi driver, in his heroic efforts, has managed to divert what could have been an absolutely awful disaster at the hospital,” she told the BBC.

Britain’s interior minister, Home Secretary Priti Patel, said she was “being kept regularly updated on the awful incident.”

Nick Aldworth, a former senior terrorism investigator in Britain, said the taxi appeared to have sustained “a lot of fire damage with very little blast damage.”

He said that “whatever was in that vehicle was either a low yield or didn’t work properly, or possibly an incendiary. So I think it’s very much open to debate at the moment about what has happened.”

Britain’s official threat level from terrorism stands at “substantial,” the middle rung on a five-point scale, meaning an attack is likely.

The Joint Terrorism Analysis Centre sets the threat level based on intelligence about international terrorism at home and overseas.