A police officer observes an individual appearing to loiter near a jewellery store late at night. The individual is wearing a hoodie, holding their phone in their left hand, and constantly looking up and down the street. The officer, who is on duty and in uniform, approaches the individual and asks for identification. The individual refuses to provide identification and becomes agitated telling the officer to 'piss off and leave me alone'. Can the police officer lawfully arrest the individual in this situation? Discuss the legal principles and requirements surrounding police powers of arrest, including the necessity and grounds for arrest.