UK police have declared the blast outside a hospital in Liverpool a terrorist incident and said they believed the explosion occurred when a man brought an improvised device into a taxi, CNN reported. Officers said Monday that a passenger is believed to have entered the vehicle with an explosive device that suddenly went off. The suspect died in the blast but the taxi driver managed to escape. Police have arrested four men, all aged in their 20s, and believe they know the identity of the suspect. "Our enquiries indicate that an improvised explosive device has been manufactured and our assumption so far is that this was built by the passenger in the taxi," Assistant Chief Constable Russ Jackson of Counter Terrorism North West said at a press conference on Monday. The driver has been praised by British Prime Minister Boris Johnson for preventing a larger blast. The city"s mayor had earlier said he "locked the doors" of his vehicle to limit the impact of the blast. A specialist inspects the scene of the blast outside the Women"s Hospital in Liverpool on Sunday. A specialist inspects the scene of the blast outside the Women"s Hospital in Liverpool on Sunday. "The taxi driver, in his heroic efforts, has managed to divert what could have been an absolutely awful disaster at the hospital," Joanne Anderson told BBC Radio 4 on Monday. Police said the motivation for the incident is unclear, and did not confirm that the hospital was the target. Jackson said police were "aware" of a nearby Remembrance Sunday event commemorating Britain"s war dead, but did not draw a connection with the blast. Surveillance camera footage appears to show the taxi slowing to a stop in the hospital"s car park, before a sudden blast takes place. A man is seen leaving the car before it is quickly engulfed in flames. Johnson said on Monday that "it does look as though the taxi driver in question did behave with incredible presence of mind and bravery," according to PA Media.