If AMD launch a 1080 beating card for £500, Nvidia wont be able to charge £800+ for the 1080Ti.
Why? what's stopping Nvidia charging £800 plus? They have already seen that people will pay that price.
Plummet? Depends on your definition. As I mentioned earlier, some people predicted (or rather wanted) the 980Ti to be a £200 second hand GPU last year when the 1070/1080 were released... it STILL isn't lol! Yes prices always fall, but I'd be interested to know what you expect second hand 1080's to be going for in a month's time when the 1080Ti is out?
The reason the 980ti's didn't drop as much as they should have was because Brexit caused the prices of the 1070 to be higher than it should have been. You keep mentioning the £200 like everyone expected them to drop that far, all that discussion at the time came from one person's bid on the MM here.