Merge to Panorama stopped working

I have the latest versions of Bridge, Camera Raw and Photoshop installed on my PC, but when I try to merge several images into a Panorama, the software starts spooling before delivering an error message: "Could not merge images". I have tried different variations (i.e. smaller number of pictures, smaller file sizes, etc.) to no avail. The symptoms are consistent. Needless to say that it was working fine in the past, but because I have the automated software updates in place, I cannot confirm when the issue started to occur.

Any advice?