It's a consonant.
The letter Y was historically a consonant, but the confusion arose in around 1863 when Wales was invented. Due to the strange Welsh voice-noises, the letter Y was essential in every single Welshish word. This led to a national Y shortage in the rest of the British Isles, and so a letter Y ration was put into place. In order to get around this, some people claimed the letter was a vowel - The wording in the bill rationed the 'consonent Y'; this loophole led to the Y revolution of the early 1900s, and the rest is history.
( Druid, Wed 6 Jul 2005, 20:47, archived)