Preheat your oven to 350°F (180°C). Line a 9-inch (22 cm) cake pan with parchment paper.
In a large bowl, whisk together the flour and baking powder.
In another bowl, cream together the butter and sugar until light and fluffy. Beat in the eggs one at a time.
Stir in the milk, then gradually fold in the dry ingredients until just combined. Do not overmix.
Pour the batter into the prepared pan and bake for 30-35 minutes, or until a wooden skewer inserted into the center comes out clean. Let the cake cool completely in the pan before frosting.
Make the caramel: In a saucepan, slowly melt the sugar over medium heat until it becomes golden brown. Carefully pour in the heavy cream and stir until smooth.
Let the caramel cool slightly, then whisk in the powdered sugar and butter until smooth and creamy.
Slice the cooled cake horizontally into two layers. Spread the caramel cream filling evenly over the bottom layer.
Frost the top and sides of the cake with the remaining caramel cream. Drizzle with caramel sauce.
Refrigerate the cake for at least 2 hours before serving to allow the flavors to meld.
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