The threat level is now classified as "severe", which means that an attack is considered "highly likely" during the next six months.
The increase is motivated not only by Wednesday's attack, but also by an increased threat in general from both Islamist and far-right extremists, the British government said in a statement.
Two Jewish men were stabbed in an attack in the Golders Green area on Wednesday. The incident is being investigated as a terrorist crime.
The suspected perpetrator, a 45-year-old man, has a history of violence and mental illness, according to police. He has previously been referred to a state preventive anti-terrorism program, the BBC reports.
