It is another grey area, so different people will say different things. If you don't fly then yes you are entitled to a full refund. You are also entitled to be flown back to your start point if you are midway on the outbound (a very useful thing to know). But the regulations definitely doesn't specify clearly you are entitled to both refund and compensation, nor, I suppose, do they rule it out.

On the basis airlines will do the minimum necessary, my personal feeling is that it's either refund on flight or compensation, but not (in this situation) both. You won't directly find any reference to compensation for delays in the regulations either, so that makes it more difficult to argue.

The counter argument (I think) is that you had the hassle, so you get the money. If it came to court, and went to appeal (etc) I actually think that view would win the day, but I don't see an easy way of getting to that point.

So hopefully your insurance will prevent you from being out of pocket.

Incidentally in my experience very few airlines are as helpful (probably not quite the right word) as BA are on this issue. Many airlines simply say no, but you can sue us if you're that bothered.