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Countries across the world are paying tribute to the incident, with a British flag flying above Cork Town Hall in Ireland and buildings in Hong Kong displaying messages of support.
The Manchester blast came four years to the day since Lee Rigby was murdered by Islamic extremists in Woolwich.
The terror group said in a statement on Telegram: “One of the soldiers of the Caliphate was able to place an explosive device within a gathering of the Crusaders in the city of Manchester.”US intelligence officers said the US is yet to verify the claim made by ISIS.
Less than 24 hours after the attack thousands of people gathered in the centre of Manchester to pay tribute to the victims.
The area around the stadium remains in lockdown as authorities continue with their investigations.
A series of raids are understood to be taking place across Manchester with police arresting a 23-year-old man in south Manchester in connection with the bombing.
Many of the injured are in a life-threatening condition following the explosion, which happened just after 10.30pm last night, while 12 of the injured are aged 16 or under.
It is not known how many children were among walking wounded who went to hospitals.
He has been named by Greater Manchester Police this evening as Salman Abedi, 22.
Greater Manchester Police said the controlled explosion is connected to the ongoing terrorism investigation.
Police said in a statement: “Police have executed warrants, one in Whalley Range, and one in Fallowfield, where a controlled explosion took place, as part of the investigation into last night’s horrific attack at the Manchester arena.”Police activity has centred on a flat in a newly-built four-storey block of apartments in Carlton Street in Whalley Range, a mile from the other address being raided in south Manchester.
In emotional scenes, a huge crowd at Albert Square chanted "Manchester! The Bishop of Manchester James Price Lee said: "Love, in the end, is always stronger than hate."Speaking after a meeting in Manchester, Mrs May described the attack as "barbaric".
She said: "It is an absolutely barbaric attack that has taken place, to cut off young lives in this way, and it is absolutely devastating and our thoughts and prayers must be with their families and friends at this horrendous tragedy that has taken place."I'm very clear that the police and the security services have the resources to ensure that they continue their investigation."I would like to thank all of those involved, the police and other emergency services, for the amazing way that they responded to this terrible incident."I've just been hearing of police officers who were off duty turning up, wanting to ensure that they could contribute, that they could help."So many people have helped.
Elsewhere in the city police evacuated the Andale Centre following reports of a suspicious bag being found and glass being smashed.