Preheat and Prepare
Preheat your oven to 350°F (175°C). Thoroughly grease a 1½-quart baking dish with butter, ensuring all sides are coated to prevent sticking. This preparation step is crucial for easy serving later.
Combine Bread and Raisins
Place the bread cubes and raisins in a large mixing bowl. Distribute the raisins evenly throughout the bread to ensure they're well incorporated in the final pudding.
Prepare Milk Mixture
In a saucepan, combine the milk and ¼ cup of butter over medium heat. Warm the mixture until the butter is completely melted, but avoid boiling. Pour this warm mixture over the bread and raisins, then let it sit for 10 minutes to allow the bread to fully absorb the liquid.
Create the Custard Base
Add the granulated sugar, beaten eggs, vanilla extract, and ground nutmeg to the soaked bread mixture. Stir gently to combine all ingredients without breaking down the bread cubes too much. The goal is to maintain some texture while ensuring everything is evenly mixed.
Bake the Pudding
Pour the entire mixture into your prepared baking dish, spreading it evenly. Bake in the preheated oven for 40–50 minutes, until the top is golden brown and the center is set. A knife inserted in the center should come out mostly clean with just a bit of moisture.
Make the Vanilla Sauce
While the pudding is baking, prepare the sauce. In a medium saucepan, melt ½ cup of butter over medium heat. Add both white and brown sugars, stirring continuously until the mixture is smooth and begins to bubble (approximately 5–8 minutes). This caramelization process adds depth to the sauce's flavor.
Finish the Sauce
Slowly stir the heavy cream into the sugar mixture, being careful as it may splatter initially. Continue cooking and stirring until the sauce is slightly thickened, about 3-4 minutes. Remove from heat and stir in the vanilla extract. The sauce should coat the back of a spoon but still be pourable.