Follow up - booked an appointment at a Genius Bar and they replaced the iPhone.
As soon as I started to explain the problem, the woman recognised the issue and there were no questions asked.
It was still in warranty. I wonder what would have happened if the phone was outside of warranty? The OS update broke the phone but would Apple have replaced it? I don't know.
A friend of mine has recently had the same experience with an Ipad when updating to iOS7 but mine was fine.
Makes me nervous when Apple bring out an update to iOS.