This problem appeared on 3 machines within a day of each other and despite quite a bit of googling didn’t appear to have much info about it or why it had suddenly appeared. Creating a new profile which used cached mode provided a workaround but it wasn’t a good solution especially if you use Outlook in a terminal server environment. Repairing Outlook did not have any effect. Logging on as another user on the same machine allowed a new non cached profile to be created !!
In the end if appeared to be an update gone wrong and the solution was to roll back to an earlier version of Outlook 2016
in elevated dos session
cd %programfiles%\Common Files\Microsoft Shared\ClickToRun\
OfficeC2RClient.exe /update user updatetoversion=16.0.11901.20218
(Note the updatetoversion number is actually a downgrade – the problem version for me was version 1908 build 11929.20254)
You may also want to disable office updates until Microsoft resolve the issue