Drat! Forgot about that. You were right Gary, there was no ‘authentication’ section under the ‘General’ tab.
So I removed the hotmail account and added it back. My folders seemed intact but it still wouldn’t send. I checked the account again, and noticed under the IMAP and SMTP tabs, that under ‘authentication’, it had ‘Use identity credentials’ ticked. So I thought I may as well try changing them to ‘Use these credentials’ in both of them to see if that helped. I can now send emails again. I’m back in business!