Arsenal would beat Inter and this 'assessing how good they are', is 28 games not enough? Obviously Arsenal are a good team and a young side that's likely to be City's closest rival for the next few years.
In the CL Arsenal wouldn't want to get City or Madrid, anyone else they'll be favourites against.
The CL is not the PL, though. On paper Arsenal might be favourites against most teams, but they lack experience in such games. Inter are a tough team, as we saw in the final. And the tie with Porto is not a forgone conclusion. They lack the physicality of most English teams but are much better on the ball than, say, Brentford.
In Pep's early seasons, City lost vs Monaco, Spurs, Lyon...After gaining experience, we reached the semis 3 seasons in a row. If we make it 4 seasons in a row, that might be an English record.