Add new email account on Mac saying unable to verify account name or password

Hi, I hope someone can help as I’m going round in circles. I kept being unable to send outgoing mail and when I tried to enter the password it kept saying it was incorrect. I’ve now deleted the account and trying to add back on and I keep getting the message unable to verify account name and password.

I’ve tried restarting a couple of times and still the same issue. The password for the hotmail email account is correct as I’ve checked on another device.

I wondered if it’s something to do with 2 factor authentication?

Anyone any ideas how to fix this please?