Speaking exclusively to YourMoney.com’s sister title and prominent trade magazine Investment Week, the star stockpicker questioned both the sustainability of the UK recovery and the expectation that it will be the first major developed economy to raise rates after the financial crisis.

With the Bank of England now predicting GDP growth of 3.4 per cent for 2014, and other economic data such as unemployment figures also improving, Bank of England Governor Mark Carney has said the base rate of interest could be as high as 3 per cent by 2017.

But Woodford (pictured) said the economy is yet to normalise, and consequently he predicts rates may still be at a historic low of 0.5 per cent in three years’ time.

“I am more cautious on growth in the UK than the crowded consensus. The economy has not normalised, and I do not yet see scope for the current rate of UK growth to be sustained,” he said.

“Therefore I am much more cautious on when rates will rise in the UK. It is further away than people think.”

The market consensus currently is for an initial hike of the base rate from 0.5 per cent in the first half of 2015, although some economists have suggested a rise could come as soon as quarter four this year.

Expectations have gradually been brought forward following a string of strong data updates.

For example, the OECD predicts UK GDP will grow by 3.3 per cent in the first half of 2014, faster than any other G7 nation.

With the BoE increasingly expected to move first on rate hikes, ahead of central banks in the US and other major nations, sterling has risen to its highest level in five years as currency markets factor in a rate rise.

However, Woodford said investors are focusing too much on the positives, and believes the economy has not yet healed from the trauma of the financial crisis.

“The consensus is that rates start to rise in the first half of 2015, and I think it is significantly later than that,” he said. “I can easily envisage an environment where interest rates do not go up in the next two to three years.”

The manager will launch a new equity income fund at his newly established business, Woodford Investment Management, next month. But he also remains cautious over the prospects for equity markets.

He said UK equity market valuations have raced ahead of fundamentals, with the bull market of recent years now in a “mature” phase, and he noted he is cautious on markets in general.

“Valuations have risen almost everywhere so, by definition, there is more risk in markets. Over the next five years, it will be more challenging as the authorities wind down money printing and rates start to normalise,” he said.