does the pressure affect the hot water coming on when the tap is turned?

The pressure on the gauge is not responsible for the hot water fault. As long as you have around 1-1.5 on the gauge every thing should work.
You don't mention the make and model. Most combi's have either got a divertor valve or a flow sensing valve to detect the operation of a hot tap. The source of your problem probably lies there. Don't know how long ago you asked your question (only just found this site a couple of days ago).
Add the make and model if you are still having problems.
23/4/07

T.H.S
April 2007

set to 1.5 bar but not less than 0.7 bar

hi-spec plumbing
April 2007