Yes, italics are fine for thoughts, even in the middle of dialogue, though as written I wouldn't have bothered in this case -- it's a kind of narrative thinking which doesn't need italics. But if it is direct thought, requiring italics, I'm worried the tense here is wrong. If they are at present, ie at the time they are talking, in 15th century England, it should be Bicycles don’t exist in 15th century England!
because he's thinking it to himself there and then.
Erm... do you mind if I correct a mistake, and point out something else? (Rhetorical question since I'm going to, anyway...
) Professor Patrick Pending!” exclaimed Tarquin. “He’ll be able to read it!”
Full stop and capital -- the last thing he said ended with an exclamation mark which closed the sentence as far as his speech was concerned. (The lower case for "exclaimed" is right, of course.)
And the "Jeremiah stood and gawped." line, I think is better off in a paragraph of its own, so as to avoid confusion.
(Sorry. Once a nit-picker, always a nit-picker...
EDIT: Whoops! Just seen this is in Workshop. Will move it over to GWD.