The "New Folder" icon at the top right hand section of bridge has suddenly showed up as a faint outline and is no longer clickable. Ctl + Shft + N doesn't work either and when I go to File on the navigation bar the "New Folder" link is greyed out.
How can I restore the New Folder functionality?
It's possible that you are on a device that doesn't let you have access to creating files in that area. Because you said "Ctl," I assume you're on a PC. If on a Mac, you'd have said "Command."
I'm not a PC person, but I know they've adopted some of the protection aspects of Macs where you have to OK permission for an application to access external drives, etc. To test this, go to a place where you have your images stored and see if the folder icon works. If it does work, that means you have to do what's necessary to let Bridge have access to that other location.
Because I'm a Mac guy, I do not know how to guide you on how to provide permission for Bridge.
I hope that makes sense.