Combine the oil, cinnamon and orange zest in a large bowl. Use a small amount to grease a medium ovenproof dish (roughly 8-inch square).
Break the bread into small pieces into the bowl with the oil mixture. Stir well until all of the pieces are coated in oil.
Spread the bread evenly into the prepared baking dish. Sprinkle the raisins on top.
To prepare the custard, whisk 2 ½ cups of the milk and vanilla in a large saucepan over medium heat. Meanwhile, in a small bowl, whisk together the remaining ½ cup of milk, sugar and cornflour until perfectly smooth.
As the milk in the saucepan starts to bubble, slowly whisk in the cornstarch mixture. Whisk well until smooth and combined, then place over a medium–low heat. Simmer gently for 6 to 8 minutes, or until the custard is almost boiling and coats the back of a wooden spoon, whisking continuously.
Pour the custard over the bread. Leave to soak for around 20 minutes. Meanwhile, preheat the oven to 350°F (175°C).
Place the dish in the hot oven for 25 to 35 minutes, or until lightly golden and starting to set.
Remove from the oven, let it cool slightly, then dust with powdered sugar and serve while still warm.