The collision happened in Squirrels Heath Road
The suspect, who is aged in his 30s and from Brentwood, was arrested on suspicion of causing death by dangerous driving.
He remains in hospital following the collision, and his injuries are not life-threatening.
Investigators say he was driving a black Volkswagen Golf, which was one of eight vehicles involved in the crash, which also involved pedestrians.
A male pedestrian, aged 48 and from Romford, passed away at the scene, as did a 64-year-old woman from Upminster. She was a passenger in one of the cars.
Six other people were taken to hospital as a result of the incident, and all have now been discharged.
The police investigation is being led by detectives from the Met’s Serious Collision Investigation Unit. (SCIU)
Detective Constable Phil Stokes said: “Two people have died as a result of this collision and their families will be devastated and looking for answers.
“We need anyone who witnessed the collision, or has any information about the events leading up to it to do the right thing and contact police. Any information will be useful and certainly anyone who has dash cam footage could be vital to our inquiry. You can also give information to Crimestoppers if you do not want to give your name.”
The collision happened at about 1.15pm on Thursday, 20 February at the junction of Squirrels Heath Road and the A127.
Witnesses or those with any information are asked to call police on 101 or contact via Twitter @MetCC. Please quote CAD 3570/20FEB.
To give information 100% anonymously contact independent charity Crimestoppers on 0800 555 111 or online at crimestoppers-uk.org.
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Tags: Romford, Havering, Brentwood, Upminster, Harold Wood, A127