Preheat the oven to 180°C (160°C fan). Grease and line two 20 cm round cake tins.
In a large mixing bowl, cream together the softened butter and caster sugar until light and fluffy.
Beat in the eggs one at a time, ensuring each egg is fully incorporated before adding the next.
Stir in the vanilla extract.
In a separate bowl, sift together the plain flour and baking powder. Gradually add this to the wet mixture, alternating with the milk, beginning and ending with the flour mixture. Mix until just combined.
Gently fold in the rainbow sprinkles.
Divide the batter evenly between the two prepared cake tins.
Bake in the preheated oven for 25-30 minutes, or until a skewer inserted into the centre of the cakes comes out clean.
Allow the cakes to cool in the tins for 10 minutes, then turn out onto a wire rack to cool completely.
In a large bowl, beat the softened butter until smooth.
Gradually add the icing sugar, one-third at a time, beating well after each addition.
Add the vanilla extract and milk, and beat until light and fluffy.
Once the cakes are completely cool, place one layer on a serving plate and spread a thick layer of buttercream on top.
Place the second layer on top and spread the remaining buttercream over the top and sides of the cake.
Decorate with additional rainbow sprinkles.
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