A convicted terrorist was shot dead by armed police after stabbing two people on a London high street.
The Metropolitan Police said they were treating the incident in Streatham at 2pm on Sunday as an Islamist-related attack.
Officers named the suspect as Sudesh Amman, 20, who had been released from prison days earlier.
A man in his 40s remains in hospital but is no longer in a life-threatening condition. A woman in her 50s was discharged following treatment.
Police said a third victim suffered minor injuries, believed to be caused by flying glass during the shooting of the suspect.
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"I was crossing the road when I saw a man with a machete and silver canisters on his chest being chased by what I assume was an undercover police officer - as they were in civilian clothing," he told the PA news agency.
"The man was then shot. I think I heard three gun shots but I can't quite remember. After that I ran into the library to get to safety. From the library I saw a load of ambulances and armed police officers arrive on the scene."
"When we drove up the street we saw a body on the ground, we presumed he had stabbed."
"I was walking out the chicken shop and heard gunshots, I could see blood on the floor everywhere," Malik, a barber who works on Streatham High Road, told The Independent.
"There's a lady outside of a pharmacy who had been stabbed in the back with a knife, everyone was helping her, a man came out the car.
"I'm shocked it's happened in Streatham. I've been here all my life. We're always getting accidents down here but not this," Mr Mustonen-Smith told the Press Association.
"My grandson was in the Odeon and they got told to go out the back because there was a bomb. They got them to go out of the back of the cinema. They were there to watch a film.
"When it's a member of your family so close to you, you don't expect it. You're always worried about your family being on the streets but this is even worse.
"I heard two people got stabbed and apparently one man was shouting Allahu Akbar but people thought he was just a crazy man, so he got away. Apparently he had two rucksacks."
The first was the stabbing that left two dead at Fishmongers' Hall on 30 November, and the second by inmates at HMP Whitemoor last month. The perpetrators of those attacks were known extremists who had been jailed for terror offences.
In November – shortly before the knife attack at Fishmongers' Hall – the UK terror threat level was lowered from severe to substantial, meaning further attacks were likely.
That month the head of UK counterterror police said his officers were running 800 live investigations. Assistant Commissioner Neil Basu added: "It's not the volume of the threat, it's the unpredictability and the lack of intelligence that creates the real pressure.
"Targets are softer, methodology simple and cheap and the perpetrators are either lone actors or more proficient in encryption. The attacks and the planning may be less frequent but they are harder to see and stop."