Bank of England chief Sir Eddie George has called for a more balanced euro "Yes" or "No" debate as Europe gears up to introduce the single currency.

"Both sides tend to exaggerate their arguments on both the pros and the cons," he said.

Following the publication of official figures showing the UK economy to be outperforming its G7 rivals, the bank's governor also warned that a "one size fits all" approach to monetary policy in the euro zone could place Britain at a disadvantage.

"I regard the one-size-fits-all monetary policy as a disadvantage and particular risk," he said. "The same monetary policy isn't necessarily the best for every country at the same time."

Sir Eddie cautioned that any single monetary area lacked the "mitigating factors" that exist within single countries to overcome regional disparities - such as Britain's and Italy's north-south divides.

"There is more labour migration from the weaker areas to the stronger and there is more political redistribution. Those mitigating influences are not present in any significant degree at the European level," he said.

Noting that the government still has a hill to climb in convincing a sceptical electorate on the single currency's merits - "at the moment, looking at the polls, that would be very difficult" - George said that both sides of the argument needed to be more measured.

"You need to make a very careful balanced judgment and I think my concern about the debate very often is that both sides tend to exaggerate their arguments on both the pros and cons," he said. "I think you need to take a more measured, balanced view about this and them make up you mind."

Reacting to George's warning of the risks involved in the European single currency shadow chancellor Michael Howard QC joined the debate.

"The government should heed Sir Edward's warnings. Joining the euro would remove Britain's ability to decide on the right interest rate for our economy. The consequences for jobs and business could be severe. As Sir Edward says, the euro is a 'special risk.' Joining the euro is a 'special risk' we need not take," he said.