The incident began after an attempt to hold up the National Westminster Bank in the Welsh border town.
Police believe the hostage taker is a man they want to interview in connection with an attack on a 60-year-old woman which left her critically injured.
Earlier they named Edward Mark Williams, 29, as the man they wanted to question about the attack on his foster mother, Sylvia Taylor, at her home in Llangammarch Wells, Powys, on Wednesday night.
Armed police in flak jackets sealed off the area last night. Police said they were prepared to 'sit this one out', as food and hot drinks were sent to the hostages.Reuse content