Philip Hammond hints at public spending increases later this year

Chancellor's spring statement suggests that drop in deficit may release money for services

Philip Hammond has dropped the broadest possible hint that he will announce spending increases later this year as he sought to use a modest improvement in the public finances to indicate more money was on the way for hard-pressed public services.

The chancellor seized on new forecasts from the Office for Budget Responsibility showing a 5bn drop in the government's budget deficit to say that he expected to have scope to act in his autumn budget. Hammond was accused of "astounding complacency" by the shadow chancellor, John McDonnell, but said higher spending had to be accompanied by further action to reduce government borrowing and the national debt.

Related: Spring statement 2018: the chancellor's key points at a glance

Related: 'Tigger' Philip Hammond is full of bounce - but long-term outlook is gloomy | Larry Elliott

Not that much to be Tiggerish about here. Growth forecasts dreadful compared with what we thought in March 2016, dreadful by historical standards and dreadful compared with most of the rest of the world. https://t.co/qw1tZ9zy5W