Stream of consciousness is actually a fairly new literary technique. Great Expectations was written in the Victorian style, using a lot of melodrama and a first person narrator. The book therefore uses interior monologue.
The main difference between the two is that there is a disjointed, free-flowing feeling to stream of consciousness writing. It does not always seem to make sense. Stream of consciousness is a term first coined by psychologist William James in 1890.
[Consciousness], then, does not appear to itself as chopped up in bits ... it is nothing joined; it flows. (Wikipedia)
An interior monologue, on the other hand, is a conversation one has with oneself. The book uses a first person narrator in Pip’s adult self. He is very specific and articulate in his thoughts. It is an adult proficient in language usage that speaks to the reader. Here is an example from the first paragraph.
As I never saw my father or my mother, and never saw any likeness of either of them …, my first fancies regarding what they were like, were unreasonably derived from their tombstones. (ch 1, p. 4)
This Pip uses a lot of analysis and reflection when he looks back at his childhood. He is an intelligent narrator, putting the mark of an adult on his childhood thoughts. He is remembering, but also musing. He tells the reader what he felt and thought, but with his own adult commentary. As a result, we get a filtered picture of Pip’s childhood and growing up. Stream of consciousness, on the other hand, applies no filter.
Interior monologue can be defined in two ways: direct and indirect. With an indirect monologue, the author acts as the commentator who also selects scenes to be presented; with direct monologue, a character narrates and presents his thoughts and feelings as though the reader were listening to this expression.
Clearly, the narrative of Great Expectations is indirect interior monologue, for there is, indeed, the absence of any authorial comment, and the reader "hears" the articulation of Pip, who retells the history of his life-changing experiences. Frequently, too, Pip evaluates his actions and his feelings. In one instance, early in Stage I of Dickens's novel, Pip has stolen food from Mrs. Joe's pantry having made a promise to the "fearful man, all in coarse gray, with a great iron on his leg." As he descends the stairs from his room in order to take the "wittles" to the convict, Pip, in his hyper-imaginativenss, describes his feelings as he imagines that he hears
every board upon the way, and every crack in every board, calling after me, "Stop thief!" and "Get up, Mrs. Joe!"
Often Pip communicates through interior monologue his feelings in his narrative. In Chapter VI he reflects upon his pilfering of the food as he articulates his feelings,
I do not recall that I felt any tenderness of conscience in reference to Mrs. Joe, when the fear of being found out was lifted off me. But I loved Joe—perhaps for no better reason in those early days than because the dear fellow let me love him—and, as to him, my inner self was not so easily composed.
As commentator, also, Pip is prolific in his indirect monologue. For example, on the night that he learns of his "great expectations" to become a gentleman, Pip comments,
That was a memorable day to me...But, it is the same with any life. Imagine one selected day struck out of it, and think how different its course would have been.
And, in his newly acquired hypocrisy as an aspiring gentleman, the adult Pip recriminates himself in Chapter XIX about his poor judgments; he remembers the man he thinks of as a "swindler" when he is younger, but then likes because of his flattery:
If I had taken ten times as many glasses of wine, i should have....repudiated the idea [that he was my friend]. Yet for all that, i remember feeling convinced that I had been much mistaken in him, and that he was a sensible, practical, good-hearted, prime fellow.
Certainly, it is by means of Pip's interior monologue and its revelations of the soul of the narrator that the reader witnesses his maturation, along with Pip's new comprehension love and family and friendship hold the greatest values rather than money and social position.