A criminal investigation and public inquiry into the fatal blaze, in which at least 58 people are feared to have died, will examine whether building regulations had been breached at the tower block in west London, Philip Hammond said.
He told the BBC's Andrew Marr Show: "My understanding is the cladding in question, this flammable cladding which is banned in Europe and the US, is also banned here."
Senior civil servants have been called in to deal with the aftermath of the tragedy amid criticism of the way the crisis has been handled by Kensington and Chelsea council.
Volunteer Nisha Parti claimed survivors are being given just Â£10 a day to live on by the council and are unable to access the huge donations pledged by members of the public.
She told ITV's Peston on Sunday: "There is money pouring in from all these amazing volunteers, we can't get access to the money and we cannot get it to the families."
Father's Day cards were among the tributes left close to the charred remains of the tower on Sunday, while firefighters leaving the scene were greeted by cheers and applause from the local community.
Sadiq Khan attended a local church service to remember those who lost their lives or remain missing after suggesting high-rise tower blocks dating from the 1960s and 1970s could be torn down in the wake of the deadly fire.
Writing in the Observer, the London mayor said it may well be the "defining outcome of this tragedy that the worst mistakes" of that era become a thing of the past.
Tottenham MP David Lammy called on Prime Minister Theresa May and the Metropolitan Police to immediately seize all relevant Grenfell Tower documents amid concerns among residents of a cover-up.
He said: "We need urgent action now to make sure that all records and documents relating to the refurbishment and management of Grenfell Tower are protected."
Police have warned the death toll from the fire could rise further after confirming at least 58 people had died, or are missing and presumed dead.
NHS England said 18 patients remain in hospital after the fire, including nine who are in critical care.
At 58 casualties, it would make the Grenfell Tower blaze the deadliest in the capital since the Second World War.
The Home Office said it is "making arrangements" for the family of 23-year-old Syrian refugee Mohammad Alhajali - the first victim to be formally identified - to travel to the UK for his funeral.
Mrs May, who met victims at 10 Downing Street on Saturday, has ordered more boots on the ground at the scene after labelling the support given to families in the aftermath of the tragedy "not good enough".
The PM, who "welled up" after hearing harrowing accounts from people caught up in the deadly fire, said there had been "huge frustrations" on the ground as people struggled to find information.
She added: "I have ordered that more staff be deployed across the area, wearing high-visibility clothing, so they can easily be found, dispense advice and ensure the right support is provided."
More than 250 firefighters tackled the blaze in north Kensington which London Fire Commissioner Dany Cotton has likened to a "disaster movie".
Speaking to the Observer, she said crews did not follow normal practice, adding: "Had we just followed standard fire brigade procedures, we would not have been able to commit firefighters in and conduct the rescues we did."
Police have appealed to anyone who may have escaped from the building, but has not yet come forward, to make themselves known.
John Cowley, managing director of CEP Architectural Facades, which fabricated the rainscreen panels and windows for Grenfell Tower's cladding sub-contractor Harley Facades Ltd, said: "Reynobond PE is not banned in the UK.
"Current building regulations allow its use in both low-rise and high-rise structures.
"The key question now is whether the overall design of the building's complete exterior was properly tested and subsequently signed off by the relevant authorities including the fire officer, building compliance officer and architect before commencement of the project."