Text going overset on line wrap

Hi, I have a text frame containing text. Whenever I have a line wrap, the text after the wrap goes overset. I have tried a number of papragraph styles and they're all fine. I just cannot work out what is going on!
Before the line wraps (this can be the first line, it makes no difference):

And once I add a few more characters to the end of the final line (story editor shown above text):

I can drag the text frame into totally empty space and that makes no difference... The frame seems as vanilla about as you can get (no options set on other tabs):

Is it my error? A bug? Or am I just missing something really obvious?
Thank you!
Mike